Michigan Leads the Country in Unemployment Recovery

Since the end of the Great Recession, Michigan has experienced the largest decline in unemployment of any state, according to data from the U.S. Bureau of Labor Statistics.

Michigan’s unemployment rate has fallen 9.6 points from its June 2009 high. The rate was 14.9 percent then, while the current rate is 5.3 percent (as of July). The state also leads the nation in the percentage decline of the number of people who are unemployed — a 66 percent drop over that same time period.

Indiana’s unemployment rate fell six points, the nation’s second-largest decline after Michigan. Idaho saw a 55 percent decrease in the number of unemployed people, the second-largest decline in that metric.

There were 737,250 unemployed people in Michigan in June 2009. As of July, the figure had fallen to 249,158.

“Michigan's economy has done very well in creating jobs since the end of the Great Recession,” said University of Michigan economist Don Grimes.

But Grimes said down the road there could be two problems for Michigan.

The state’s gross domestic product growth has lagged behind its employment growth, Grimes said in an email.

“This means the growth in the state's productivity is not doing as well as these other metrics show,” he said. “Second, we have a low and declining labor force participation rate (and a very slowly growing population) which is why the ranking with respect to the change in the unemployment rate is even better than the ranking in terms of job growth. Unless this changes we are going to run out of potential workers very soon.”

James Hohman, the assistant director of fiscal policy at the Mackinac Center for Public Policy, performed the analysis of federal data, revealing the dramatic decline in the state’s unemployment.

“At some point, tight labor market conditions are going to encourage people to enter the work force, or encourage people in other states to move to Michigan for jobs, finally reversing a long-standing out-migration trend,” Hohman said.