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Appendix B
Economic Base of Michigan
[APRIL 1, 2002] These ten exhibits display key statistics
pertaining to Michigan's economic base—wage and salary employment,
unemployment, nonfarm employment, consumer price index, per capita
income, personal income, motor-vehicle sales, motor-vehicle production,
agricultural income, and tourism spending—with comparisons
to the nation as a whole; the latest comparable data are used. Sources
are the U.S. Bureau of Labor Statistics; Michigan Department of
Career Development; Michigan Employment Service Agency; Automotive
News Market Data Book, Crain Communications, Inc.; Michigan
Senate Fiscal Agency; U.S. Department of Commerce, U.S. Bureau of
Economic Analysis; and Michigan State University Department of Park,
Tourism, and Recreational Resources.
EXHIBIT 1.
Wage and Salary Employment, Percentage Change from Previous Year,
United States and Michigan, 1980–2001
Because of Michigan's reliance on the motor-vehicle
industry, the state economy traditionally has been more volatile
than the national economy. This exhibit shows that during the upswing
of the 1980s, wage and salary job growth in Michigan exceeded that
of the nation as a whole, but during the recession that followed
(in the early 1990s), so did the state's job declines. Since 1996
employment growth in Michigan has trailed national employment growth,
in part because Michigan did not benefit as much from the technology
boom as the nation as a whole.
EXHIBIT 2.
Unemployment Rate, United States and Michigan, 1970–2001
The unemployment rate measures the percentage of the
total work force actively looking for work. During economic downturns,
the rate tends to underestimate the number of unemployed because
people become discouraged and stop looking. Michigan's reliance
on the heavy-manufacturing sector is a primary reason that except
for a dramatic reversal from 1994 to 2001, the unemployment rate
in Michigan historically has been higher than the U.S. rate.
EXHIBIT 3.
Nonfarm Employment Distribution, by Industry, United States and
Michigan, 2001
The distribution of employment by industry in Michigan
is similar to that of the United States with one notable exception:
Michigan has a larger share of manufacturing than the rest of the
country, due in large part to the concentration of the motor-vehicle
industry in the state. In 2000, motor-vehicle jobs accounted for
6.1 percent of Michigan wage and salary employment and about 20
percent of all manufacturing jobs. (The percentages would be higher
if related jobs in such other industries as metalworking and rubber
and plastic were included.)
EXHIBIT 4.
Consumer Price Index, United States and Michigan, 2000
A consumer price index is an indicator of cost-of-living
changes. The Detroit–Ann Arbor index is used here because
it is the only one available for Michigan, and it approximates the
price level for the state as a whole. The base period against which
price increases are measured is 1982–84 for all categories
except recreation and education/communications, which are measured
from 1997. As may be seen in the “all items” figures,
prices in Michigan generally have not risen quite as much they have
nationwide. The exceptions are (1) transportation, in which Michigan
prices have increased 62.5 percent since the base period, while
U.S. prices are up 53.3 percent and (2) the relatively new categories
of recreation and education/communications. In 2001 the U.S. CPI
increased 2.0 percent and the Michigan (Detroit–Ann Arbor)
CPI increased 2.7 percent.
EXHIBIT 5.
Michigan per Capita Income as Percentage of U.S. per Capita Income,
1950–2000
Michigan's per capita income exceeded that of the
United States during the 1950s, 1960s, and 1970s. However, in the
1980s, when the automobile industry began experiencing serious problems
and engaged in extensive layoffs and cost-cutting measures, the
state's per capita income fell below the national average. The initial
dip occurred in 1981 (although the falloff had began in 1977) and
since then, Michigan's per capita income has see-sawed around the
national rate, exceeding it in only seven of the last 20 years.
EXHIBIT 6.
U.S. and Michigan Personal Income, Total and per Capita, 1976–2000
This exhibit includes several measures of personal
income: total, real (adjusted for inflation), and per capita.
In 2000 total Michigan personal income (MPI) was $289.4
billion, about 3.5 percent of total U.S. personal income. Michigan
personal income growth historically lags behind national growth:
From 1995 to 2000, MPI increased only 25.0 percent while the national
rate rose 34.2 percent. The picture is similar for the last 20 years:
From 1980 to 2000, MPI increased 201.6 percent compared with national
growth of 259.2; the average annual growth rates were 5.7 percent
and 6.6 percent, respectively.
Adjusted for inflation, the real 20-year average annual
growth rates for Michigan and the nation were 2.0 percent and 2.7
percent, respectively.
One reason that Michigan historically has lagged behind
the nation is that the Midwest is growing more slowly than the South
and West. More recently, the state did not benefit as much as other
states from the explosive growth of the technology sector in the
1990s.
EXHIBIT 7.
U.S. Light Motor-Vehicle Sales, 1970–2001
Sales of light motor vehicles (vehicles weighing less
than 10,000 pounds—includes cars, SUVs, vans, and some pickups)
historically have been volatile, as may be seen in the steep peaks
and valleys shown here. After the roller coaster ride of the 1970s,
light motor-vehicle sales increased consistently in the 1980s but,
although the increase parallels income and population growth, the
entire increase was in light trucks. The move from passenger cars
to trucks accelerated in the 1990s. Passenger car sales averaged
almost 1.3 million units less annually than in the 1980s, and light-truck
sales averaged about 2.3 million units more. In 2001 total sales
surpassed 17 million, an all-time high, but over half (50.5 percent)
of the units sold were light trucks; many were minivans and SUVs
that replaced station wagons and large sedans for family transportation.
EXHIBIT 8.
Michigan Motor-Vehicle Production as a Percentage of U.S. Production,
1970–2001
Michigan's share of U.S. motor-vehicle production
has declined over the past 30 years. The decline is due to more
foreign competition, which has caused plant closures in Michigan,
and the movement of some motor-vehicle production to lower-cost
states and nations. Another factor is that while Michigan produces
fully a third of all cars built in the country, it produces only
17.5 percent of the light trucks. In number of units, Michigan motor-vehicle
production peaked at nearly 4.3 million units in 1973. In 2001 Michigan
production was about 3.1 million units, almost 28.0 percent below
the 1973 level.
EXHIBIT 9.
Farm Income as a Percentage of Personal Income, Michigan and Selected
States, 2000
Agriculture is an important Michigan industry but
relatively small in terms of income generated, and it is less important
than in many other states: Nationwide, farm income in 2000 was 0.6
percent of total personal income, but in Michigan it was only 0.2
percent. Michigan ranks below other states in the Great Lakes region
in terms of agriculture's contribution to the economy.
EXHIBIT 10.
Estimated Tourism Spending, Michigan, 1996–2000 ($ billions)
Tourism is a major industry in Michigan, generating
nearly 164,000 direct jobs and about $2.2 billion in tax revenue
(1999 estimates). When spillover or multiplier effects is considered,
the industry is responsible for about 215,000 jobs.
CONTENT CURRENT AS OF APRIL 1,
2002
© 2002 Public
Sector Consultants, Inc.
Sponsored by the Michigan Nonprofit Association and the Council
of Michigan Foundations
www.michiganinbrief.org
 
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