Good-paying jobs key to Michigan’s success
The economic headline this month is the unemployment rate nationally falling below 4 percent for the first time since the turn of the century. But that good news comes with two troubling economic realities. We reached sub 4 percent in part because there are far more adults not even looking for work. So, the denominator is depressed as well as the numerator growing. And, maybe most worrisome, wages are not growing anywhere near as fast as during previRobeous eras of low unemployment.
The reality is the unemployment rate is no longer a good measure of economic success. Too many of us are working in low-paid jobs. We need to reframe the goal of economic policy from President Regan’s “the best social program is a job” to “the best social program is a good-paying job.”
The preeminent challenge of our times is figuring out how to reverse what is being called the Great Decoupling. Where even when the economy is growing and the unemployment rate is low, only those at the top are benefiting from that growth. The policy priority needs to be re-establishing an economy that as the economy grows, all Michigan households enjoy rising incomes.
In good times and bad, far too many Michigan households are experiencing declining or stagnant incomes. Since the turn of the century — no matter who was in control in Lansing and Washington — Michigan has moved from being a high-prosperity to a low-prosperity state.
Most concerning, the Michigan Association of United Ways found 40 percent of Michigan households in a strong economy do not have sufficient income to pay for the necessities: primarily housing, child care, food, health care and transportation. Their report makes clear that this is an all-Michigan problem: in every county, among all races and all ages.
More broadly, our challenges in Michigan are similar to those Robert Putnam documented in his book “Our Kids”: that the top quarter of American households are doing well and the other three-quarters are struggling to keep up, many falling farther and farther behind. On measure after measure of economic and social well-being of households, Putnam presents charts that look like open scissors with those in the top quartile advancing and those in the bottom three quarters declining.
This pattern is true irrespective of race. Racial discrimination is an ongoing reality in employment, education, housing and the criminal justice system; but class is now the main dividing line in the American economy, and increasingly, class is defined by college attainment.
The think tank I lead, Michigan Future Inc., believes to meet this challenge requires the transformation of state economic policy, starting with a new mission. It should now be clear that having a growing economy, a low unemployment rate or being business friendly — all of which have been the goals of state policymakers now and in the past — does not lead to an economy that benefits all.
The key to having an economy with rising household incomes for all are good-paying jobs and careers, where careers last 40 years. We believe the prime focus of economic policy must be helping people have a career of good-paying work. Aligned with the reality that good-paying work today and, even more so tomorrow, looks much different from good-paying work in the past.
Who knows when autonomous vehicles will replace truck drivers; software, not health care professionals, will do diagnostics; software, not financial advisers, will provide us with investment advice; machines will move materials in warehouses; on and on and on. It is a matter of when, not if, much work now done by humans will be done by smarter and smarter machines.
It’s not that work will disappear but that most of us are going to have to be able to adapt and learn new skills to be able to have successful 40-year careers. That requires a transformation in our system of lifelong learning and how we support people as they transition from one occupation to the next, and more and more of us are contingent workers.
From our perspective, this is what the 2018 Michigan election for governor and state legislature should be about. How specifically are candidates going to raise household income for all in the context of an economy where the nature of work is being constantly transformed? We need to find a way to shape the conversation so that candidates in both parties find it hard to offer the same proposals they have been running on for decades that have not worked.
Where telling us they have the magic elixir to turn the clock back and recreate a prosperous 20th-century Michigan economy is not acceptable. Where telling us that having some combination of a growing economy, low unemployment and good business climate ratings will lead to a rising standard of living for all is not acceptable. And where not talking about how to pay for improving education and infrastructure — which nearly all candidates tell us matters — is not acceptable.
Lou Glazer is president of Michigan Future Inc.