Michigan's Private Sector Economy Firing on All Cylinders

Since the end of the Great Recession, nearly every sector of Michigan’s economy has seen significant growth, with a total of 360,500 more private sector jobs in 2014 than in 2009, according to the U.S. Bureau of Labor Statistics.

Michigan went from having 3.87 million jobs in 2009 to 4.18 million jobs in 2014. In 2005 the state was on a transition from a gradual economic decline into what became a very steep one. Since 2010, both employment and the Michigan economy have been on an upswing.

The strongest employment growth has been in the professional and business sector (+117,500 jobs); manufacturing (+112,800 jobs); trade, transportation and utilities (+40,100 jobs); and education and health (+35,200 jobs). Of the 16 categories that measure the differing sectors of the economy, only the “government” sector lost jobs.

University of Michigan economist Don Grimes sees the figures as good news, though some aspects raise concerns.

Grimes said the professional and business sector contained jobs that were linked to the white collar auto industry that was the core of the knowledge economy. But he also added that the growth in that sector could be attributed to the temporary help industry.

“And employment services employment has boomed in Michigan as well as the country during this recovery,” Grimes said in an email. “The growth in employment services jobs is one of the big disappointments of this recovery because these jobs tend to pay relatively low salaries, offer no job security, and offer very few benefits. And, it’s an even bigger problem for the nation than the state.”

The only sector to lose jobs was government, which has lost 51,400 jobs over the 5-year period.

James Hohman, the assistant director of finance for the Mackinac Center for Public Policy, said the loss in government jobs can be attributed to the increase in the privatization of services in public schools, which contract out work in custodial and transportation services to the private sector. Hohman said government’s response to rising pension costs has also been to hire fewer workers.