Michigan Future President Louis Glazer and University of Michigan researcher Don Grimes say that high-education industries – such as information, finance and insurance, professional and technical services, health care and education – accounted for 60 percent of U.S. job growth from 2001 to 2007. The average wage in these knowledge industries is nearly $59,000, compared to about $33,000 in all other industries.
In the Grand Rapids area, low education industries saw jobs decrease by 5.55 percent, while high education industries increased employment by 4.89 percent. In Michigan, low education industries saw jobs drop by 10.88 percent, while high education industries lost only 1.06 percent. In 2007, wages in low education industries in Grand Rapids averaged $33,716, while those in high education industries averaged $46,212.
"What we found is stunning," said Glazer, who conducted the study with U-M economist Donald Grimes. "The trends that we have written about in our previous report have accelerated in the downturn, with low-education industries dropping workers while high education industries continue to do relatively well."
The data shows that Michigan and its big metropolitan areas are lagging in the transition to a knowledge-based economy, the researchers say.
Local experts said the report confirms steps being taken in the region to keep more college graduates in the Mid-Michigan region. “The vast majority of Grand Valley's graduates remain in Michigan," said Grand Valley State University President Thomas Haas. “Ninety-eight percent of our most recent graduating class are employed or in graduate school; of those working, 88 percent are pursuing their careers in Michigan. All universities need to do more to increase our state’s concentration of college educated talent by working closely with businesses to show graduates we have well paying jobs and a great lifestyle available in Michigan and especially the Grand Rapids area.”
"Many of our members and key industries in our region require a highly educated workforce - especially in health care, information technology and similar industries - and continue to express the need for more Michigan college graduates," said Jeanne Englehart, president of the Grand Rapids Area Chamber of Commerce. "There are good jobs and a high quality of life for young people in our region and we need to make sure more of our young graduates know it."
In their report, the researchers analyzed data from the Bureau of Labor Statistics from 2001 to 2007 on all 50 states and the 54 U.S. metropolitan areas with populations of at least a million, plus Lansing and Madison, Wis.
In 2007, Michigan ranked 33rd in per capita income (down from 16th in 2000) 34th in the proportion of adults with at least a bachelor's degree and 36th in the share of wages from knowledge-based industries. From 2001 to 2007, Michigan ranked last in both overall employment growth and job growth in high-education attainment industries.
Grand Rapids lagged behind most large cities in the nation in key areas, ranking 51st in per capita income, 44th in college attainment and 53rd in knowledge-based industries of the 54 regions examined. Detroit ranked 25th in per capita income, 36th in college attainment and 37th in knowledge-based industries in 2007.
“Grand Rapids is taking the right steps, but it has much work to do if it wants to have a high-prosperity economy,” said Glazer. “Putting a focus on keeping college graduates in the community by rejuvenating downtown and connecting students to jobs before graduation are important.”
From January 1990 to January 2009, a period which has included three recessions and several prosperous years, Glazer and Grimes show that nationally low-education jobs have grown nearly 16 percent while the number of jobs requiring a higher education has grown by 32 percent.
"What most distinguishes successful areas from Michigan is their concentrations of talent, where talent is defined as a combination of knowledge, creativity and entrepreneurship," Grimes said. "Quite simply, in a flattening world, the places with the greatest concentrations of talent win.
"Michigan has lagged in its support of the assets necessary to develop a knowledge economy at the needed scale. Building that economy is going to take a long time and require fundamental change. But we believe it is the only reliable path to regain high prosperity."
Michigan’s Future’s prescription for a high prosperity Michigan says that the state should:
- Place a higher value on learning and entrepreneurship
- Create places where young, talented individuals want to live (e.g., vibrant central city neighborhoods)
- Ensure the long-term success of its higher education system by expanding public investment
- Transform teaching and learning to align with the realities of a "flattening" world.
- Develop new private and public-sector leadership that has moved beyond the desire to recreate the old economy and that is clearly focused on preparing, retaining and attracting talent.
Glazer and Grimes say that Michigan must build a diversified knowledge economy based not only on information technology, the life sciences, alternative energy and green technology, but also on finance and insurance, professional and technical services, health care and education.
For a copy of the report and more on Michigan Future Inc.: www.michiganfuture.org
