Thursday, June 19, 2008

Silver Linings: State Added Jobs in May

Lost in all the dismal numbers about Michigan's unemployment rate was this interesting fact - we actually gained jobs in May.

Despite the high unemployment rate, the state had a net increase of 6,000 seasonally adjusted nonfarm payroll jobs in May, according to a monthly survey of employers.

About 3,000 of those were in manufacturing, which rebounded slightly as strikes ended in the auto industry. Leisure and hospitality services added about 4,000 jobs while professional and business services added about 3,000.

Was it enough to meet the huge increase in demand? No, obviously not. There is no getting around the fact that the number of people looking for jobs far outweighs what is available out there, but indications are that is exactly what this statistical jump is - an influx of summer job seekers pushing the numbers up.

The rush of people looking for summer jobs swelled the size of Michigan's labor force, then pushed up the unemployment rate when they were unsuccessful, said Rick Waclawek, director of the state's Bureau of Labor Market Information and Strategic Initiatives.

Waclawek and other economists cautioned not to read too much into this month's numbers. It could take a few more months of information to determine whether the May rate symbolizes a long-term increase or if it's a temporary statistical blip.

Charles Ballard, an economist with Michigan State University, said the state has not seen a one-month jump in the monthly rate this large since at least the mid-1970s. That makes him wonder about the accuracy of the estimates.

"I never like to put too much stock in one-month numbers," Ballard said. "The most important thing you can do is look back in a couple of months and see if this holds."

The bad news is that it might hold - and, we still have shed thousands of jobs overall this year. If you remember, economists had predicted earlier this year that our unemployment rate was going to jump to around 8% or higher in 2008 before it leveled out and started to go back down in 2009. Now, due to the national recession, they are pushing that recovery back into 2010. Crain's points out that due to the rising energy costs and the credit/mortgage crunch, top CEOs have been looking to cut costs - and that is coming in the form of labor. National unemployment numbers last month also saw the highest jump since the 80s.

Every month so far this year, cautious employers have eliminated jobs. The unemployment rate rose to 5.5 percent in May from 5 percent in April, the biggest one-month rise in two decades.

CEOs are still an optimistic bunch, with 70% predicting they will hold their current employment levels or even increase payroll - although that number is down from 78% in April. They are nervous, though, and they are "tempering their expectations" about overall economic growth.

So, Michigan, what do we do now, here at home, that will help start to turn these numbers around? For starters, we can completely ignore Mike Bishop, who immediately pulled out Dick DeVos Talking Point No. 1 - "Cut Government", which has absolutely no bearing on job creation whatsoever. Matter of fact, we lost 3000 government jobs lost month, which only adds to the unemployment rate. According to MIRS, the Senate response to the unemployment numbers was to stop working for almost an hour, probably waiting for Dick to call on the bat phone and give them their marching orders.

"While the new unemployment figures are certainly shocking and disappointing, they serve as another reminder that state government must make the necessary cuts to reduce the size and scope of government," said Senate Majority Leader Mike BISHOP (R-Rochester).

Key word there? "Disappointing". Oh yeah, the chip that DeVos planted in Bishop's brain has been activated alright, and Republicans are going to use this as an excuse to continue to bury their head in the sand and parrot their extreme partisan agenda of "cut taxes and government", even though none of the news reports indicate that "taxes and government" is the cause of the problem. Deliberately obtuse, or just plain stupid? You decide.

Legislation before the Senate could be part of the solution however, but it looks like that may be obstructed and/or delayed. We will get to that in a minute. First, Governor Granholm and Speaker Dillon got together and issued a joint release that asked for the Legislature continue to work on the energy package and consider adding to the capital outlay budget - two areas that promise to produce thousands of jobs for Michigan.

The governor and speaker today pledged to work together to immediately implement an economic stimulus package and capital outlay bill that would create even more job-creation tools in Michigan.

Just yesterday, the state House approved House Bill 6208 that establishes the Choose Michigan Fund program, a loan program for job creation or retention projects to qualified businesses. The program is designed to allow Michigan to better compete with other states to bring new jobs here.


Governor Granholm said she is encouraged by lawmakers' attention to the most promising job-creation legislation still to be finalized: A comprehensive energy package that will create tens of thousands of jobs in construction and operation for renewable energy generation facilities like wind farms.

The governor may be optimistic, but the ever-pessimistic MIRS tell us that the "conservative Republican majority" in the Senate won't see fit to pass this legislation, and the difficulties in fine-tuning the small print between the House and Senate will push this into the lame-duck session after the election - costing Michigan precious time and perhaps thousands of jobs in a sector of the economy that is enjoying explosive growth and increased competition by the day. We can’t afford to fall further behind, but in an election year, cowardice rules all.

Even if the Senate is able to move its version of the Energy package before the end of the summer, it's likely the process of ironing out the differences between what the House wants and what the Senate wants isn't going to happen until after the November election.

House Energy and Technology Committee Chair Frank ACCAVITTI (D-Eastpointe) said he has no idea what the Senate will do with the proposal, but whatever changes are made are likely to be too complicated and too political to work out before Lame Duck.

"It's too hard". That familiar mantra of the lawmakers who lack the courage and conviction to act on the measures that can bring Michigan job growth. Well, "disappointing" would be the correct word in this instance. Seems crazy to cry about high unemployment numbers and then turn around and obstruct actual job creation.


Let's hope they move to get this done.