Can Michigan defuse its population time bomb? See how far we fall short
- Michigan’s population isn’t growing, while most states are gaining residents
- Population stagnation is suppressing economic growth for businesses, and job opportunities for residents
- State leaders are looking for ways to reverse the trend and bring more people and businesses here
Eric Lupher and other demographers and economists have been raising the alarm about Michigan’s population time bomb for years.
Michigan is short of workers everywhere, from its schools and hospitals to the local coney island. It faces an uphill battle to attract new businesses from out of state because of labor uncertainty. Fewer workers leads to diminished tax revenue, which leaves less money to preserve parks, protect residents and fix potholes.
The average resident driving on those roads is older, sicker and poorer than a decade ago — trends that Lupher and others say are related to our population problems, and that will accelerate in the coming decades if bold, bipartisan action isn't taken soon.
- What Michigan can learn from booming Columbus, Ohio
- Gov. Whitmer plans group to tackle Michigan’s population crisis.
- Michigan’s population crisis: What you need to know. Why it matters.
- Michigan’s pitch to lure new residents: nature, high tech, abortion rights
- Michigan loses 14K people a year to other states. It could be worse (and has)
- Opinion | To attract talent, go to states that are attacking women, gays
- Michigan business leaders: ‘We’re a below-average state’ with no quick fix
People nod, express concern, and then nothing happens.
Lupher, president of the Lansing-based Citizens Research Council, likened the reaction to his presentations to a dentist identifying cavities but doing nothing to fix them.
“We recognize we have a problem,” he said. “We commiserate with each other about the problem, but at some point, we have to begin to do something about it. Because for now we’re not doing anything.”
Leaving for anywhere
Births are plummeting and deaths are rising. More people pack up and leave the state every year than residents of other states move in.
Ohio is growing faster than Michigan. So is Indiana, Illinois, Wisconsin and every other state in the Midwest. Michigan is growing slower than all other cold-weather states and others in what is derisively called the “Rust Belt.”
In fact, Michigan ranks 49th in population growth since 1990, ahead of only West Virginia.
The impact is slow enough that many residents may not notice. But population stagnation is part of the reason Michigan workers earn less than average in the nation, and why housing values increase slower here.
And it’s going to get worse unless state leaders figure out how to reverse the trend.
That’s the conclusion of a new report released Tuesday by the Citizens Research Council, which focuses on Michigan public policy, and Altarum, a Michigan-based nonprofit focusing on health. The report, along with data analysis and reporting by Bridge Michigan, paint a portrait of a state struggling to respond to a slow-moving crisis.
“We're not trending the right way,” Lupher said.
“The decisions we're making now, the actions we take or don't take, are going to affect future generations. And it's vitally important we get our arms around this and do something about it.”
There are indications the issue is now drawing attention in Lansing. In addition to the CRC and Altarum report, Business Leaders for Michigan dropped a similarly blunt account last week, warning that Michigan is now a “below-average state” that needs to revamp its economic development strategy to attract businesses and talent.
Michigan’s population problem is also drawing the attention of Gov. Gretchen Whitmer and, as Bridge Michigan recently reported, the Michigan Economic Development Corp. plans to roll out a marketing campaign in the coming months in an effort to retain and attract young professionals.
“Michigan must not, we will not accept being a less populated state,” MEDC CEO Quentin L. Messer Jr., said in a statement. “Building a championship state is a process and a journey, often not always linear. The positive news is there is bipartisan commitment to not only the journey but also to achieving the ultimate outcome: winning for present and future Michiganders.”
Bridge, CRC and Altarum are hosting a free, online panel discussion on Michigan’s population challenge at noon Tuesday.
Panelists include Amber Arellano, executive director of The Education Trust-Midwest, Gabe Rodriguez-Garriga, vice president for strategy at Business Leaders for Michigan, Susan Corbin, director of the Michigan Department of Labor and Economic Opportunity, Jalonne White-Newsome , senior director for environmental justice at the White House Council on Environmental Quality, and Frank Ettawageshik, executive director of United Tribes of Michigan.
You can sign up for the event here.
What happened — or didn’t happen — to Michigan?
Michigan is still a large state. With a population just a touch over 10 million, it is the 10th most-populous state, though that ranking has dropped in recent decades. As recently as 1970, Michigan was the seventh most-populous. Since then, we’ve been passed by the Sun Belt states of Florida, Georgia and North Carolina.
In that half century, Michigan’s growth rate was less than a quarter that of the U.S. as a whole: 0.3 percent a year compared to 1.3 percent a year. That difference may seem small, but over time it accounts for hundreds of thousands if not millions of people.
One example: Indiana is below the national average in growth since 1990 (ranked 30th, with a 22.4 percent increase). Yet if Michigan had grown just at that same, below-average rate, the state would have 1.3 million more residents today – the equivalent of adding another Oakland County.
While most other states are growing, Michigan appears on the cusp of long-term population decline. Analysis conducted by the University of Michigan, included in the CRC/Altarum report, projects a steady population decline by 2045.
The three top reasons for Michigan’s malaise:
1. More funerals than baby showers. There were more deaths than births in all but seven Michigan counties in the year that ended last July. That’s partly because of COVID deaths, but it’s also a long-term trend (In 2021, the state had its fewest total births since World War II) that will almost inevitably accelerate and is already devastating some northern Michigan communities.
In Ontonagon County in the western Upper Peninsula, there have been five deaths for every birth since 2020. Businesses have closed, and those that remain struggle to find employees to stay open. In the town of Ontonagon in that county, downtown storefronts “look like a smile with a lot of missing teeth,” said Rich Ernest, director of the local chamber of commerce.
2. Lots move out, few move in. For decades, more Michiganders have left the state than residents of other states have moved in, and that trend is projected to get worse. By 2025, Michigan is projected to have a net loss of 14,000 in in-out migration annually, the equivalent of a busload of Michiganders leaving the state every day.
Census data suggests Michigan retirees continue to leave for the Sun Belt, while educated workers are moving to places like Washington, North Carolina and Virginia. They leave behind a state that may be at or near its population peak, amid worries that the lack of people — and workers — will hurt the economy.
3. International immigration helps, but it isn’t enough. Without immigrants, Michigan’s population would have been in decline since 2010, said Don Grimes, an economist at the University of Michigan.
If the number of immigrants coming to Michigan returns to pre-pandemic levels, the state will welcome about 22,000 new residents from other nations per year.
But even that won’t be enough to offset the state’s losses in domestic migration and deaths being greater than births by 2045, according to the report, which concludes: “Absent policy changes and investments, Michigan’s current path will lead to a shrinking population and continuing declines in the state’s competitiveness and quality of life.”
Slow but devastating impact
Michigan’s lagging population growth has coincided with troublingly sluggish economic growth for its residents.
Michigan ranked 19th in median household income in 1990. By 2020, it was 32nd, with the median household bringing in $59,600 a year — more than $6,000 below the national average. If Michigan households earned the equivalent of what they did in 2000 when adjusted for inflation, they’d be pocketing $500 more per month.
One Midwest example: A generation ago, in 1990, Michigan and Minnesota had median household incomes that were virtually identical. Since then, Minnesota’s population grew at more than three times the rate of Michigan (30 percent, compared to 8.4 percent). Today, the average Minnesota household brings in $15,000 more per year than those in Michigan ($74,000 in Minnesota, compared to $59,000 here).
The same trend appears with home values. The average Michigan home in 2000 was worth 11 percent less than the national average. Twenty years later, that home value gap tripled to 34 percent.
Take Indiana, for instance. In 2000, its median home value, $93,000, was $8,000 below Michigan’s. Now, Indiana's median home is worth $221,000, just above Michigan’s $218,700, according to real estate sales company Zillow. Minnesota’s success is more stark: its median home value was $14,000 above Michigan’s in 2000 but is now nearly $100,000 higher.
“Michigan is one of the cheapest states to buy property,” said Eric Scorsone, director of the Extension Center for Local Government Finance and Policy at Michigan State University, “but that’s because people aren’t coming here.”
Michigan’s population woes have a ripple effect through families and businesses across the state, said Ani Turner, program director for health economics and policy for Altarum, the health policy nonprofit that co-wrote the report released today.
“Growth, even modest growth, promotes higher wages, higher standards of living and more economic opportunity,” Turner said. “It creates more opportunity for the population and more opportunity for economic prosperity when the size of the economy is growing.
“What makes it especially challenging here in Michigan is that not only is the size of the population stagnating and eventually starting to fall, but all of the growth is coming from the retirement age population, (not) the workforce age,” Turner said. “Workforce is the tax base (and) the customer base. Workforce (population) is what's going to be able to recruit employers to stay here and come here.”
Between now and 2050, the population of Michiganders over 65 is expected to jump 30 percent. But residents aged 25 to 64 — the prime working age population — is expected to grow just 2 percent. From there, it gets even worse: The population of children and college-age residents are projected to dip 6 percent.
Business leaders who spoke to Bridge said it’s common for Michigan to lose out to other states in site selection for business expansions because companies aren’t sure they can find enough qualified workers here.
And companies that are already in Michigan often hesitate to expand because of workforce concerns.
“We’re short of workers across every landscape,” said Mike Jandernoa, chair of the West Michigan Policy Forum Policy Committee. “We have a horrendous problem.”
[Disclosure: Jandernoa is a member of the board of directors at The Center for Michigan, the nonprofit organization that publishes Bridge Michigan.]
“We’re already close to full employment,” with an unemployment rate of 4.1 percent in March, said Grimes. “If you don’t get an increase in the workforce, you can’t get growth. And if you don’t add jobs, you’re going to be limited in income gains.
“That’s going to (cause) unhappiness,” Grimes said. “The average family will have less wealth (comparatively) than the nation. It’s going to be really hard to fix that problem.”
Brian Calley, president of the Small Business Association of Michigan and lieutenant governor under Rick Snyder from 2011-18, was equally blunt.
“The availability of workforce is a top — if not the top — concern of growing businesses,” Calley said. “It’s not going to get any easier anytime soon.
“As hard as it is today, it’ll be harder tomorrow.”
An ignored problem
The CRC and Altarum report doesn’t lay out specific recommendations to help reverse Michigan’s population problem, but does offer areas of priority:
- Refocus on the opportunities and well-being of Michiganders, to improve health, educational achievement and job readiness
- Invest in the public services and natural resources that make Michigan a place where people want to live
- Attract new people from around the country and world including immigrants, “climigrants” and remote workers who can choose where they live
Turner, of Altarum, said she hopes the report, along with renewed interest from groups around the state, will encourage leaders to coalesce around potential solutions. That’s not always easy to do when state lawmakers have a limited time to make a difference in policy due to term limits.
“There's always a tension between dealing with the immediate and dealing with something that you can see coming in 30 years,” Turner said. “But many of the trends we’re seeing are starting to be felt now, and they’ll certainly be felt in 10 years.
“The future is coming regardless,” Turner said. “You can be on one path or another.”
A Business Leaders for Michigan report released last week ticked off a series of issues the state must address to reverse population and worker stagnation:
- Talent: Prepare residents for high-wage, in-demand careers by better educating and training them, while attracting and retaining workers in the state
- Customer service: Cut red tape and make business expansion in Michigan easier
- Place: Create attractive, welcoming and safe communities
- Entrepreneurship/innovation: Support job-creators in Michigan, including small businesses and entrepreneurs, and expand knowledge-economy jobs in part through a payroll tax credit
- Competitive business incentives: Maintaining some spending on grants for business expansion or site preparation, but reducing the amount over coming years
Among the recommendations: less reliance on business attraction incentives and more recognition of the economic value of education, vibrant communities and entrepreneurs.
“If Michigan doesn’t get it right, it could have lasting impacts,” BLM President Jeff Donofrio told Bridge last week. “It is so important for us to make sure that we’re helping empower and support businesses who are here and want to come here.”
One fledgling attempt: The Michigan Economic Development Corp., a quasi-governmental body that operates as the state’s top economic developer and marketer whose executive board is appointed by the governor, plans to roll out a marketing effort this fall focused on retaining and attracting young professionals, who are seen as key to energizing the economy. While the campaign is still being developed, conceptual ads shown to state leaders promote the state’s natural beauty, tech sector, affordability and its recent progressive cultural policies, including legal protections for abortion access and for members of the LGBTQ communities.
Sen. Mallory McMorrow, D-Royal Oak, chair of the Economic and Community Development Committee, said the state’s population problems are a hot topic in Lansing. Her committee has held several meetings on population and economic growth so far this year and she anticipates the Legislature being engaged on the issue this session.
“I’ve been trying to sound the alarm for four years and felt like it was falling on deaf ears. It’s starting to get attention now,” McMorrow said. “Fundamentally, it impacts everybody.”
Jandernoa of the West Michigan Policy Forum suggests the state must improve its education system, both K-12 and college, to lure more residents.
“We have a state with high qualities,” Jandernoa said. “We have water, it’s a beautiful state, with a low cost of living. We have huge advantages. If we could fix K-12 education, we could fix the state.”
MEDC’s Messer said the Whitmer administration is working to “focus our efforts on building Michigan’s population base while maintaining our wonderful quality of place.”
Rodriguez-Garriga, vice president for strategy at Business Leaders for Michigan, said at a Senate hearing in March that education reform is part of the puzzle, but that the key is for Michigan to take a holistic approach to the problem that can draw bipartisan support.
One example Rodriguez-Garriga cited is Tennessee, where economic development and education reforms instituted more than a decade ago have been consistently adhered to through both Democratic and Republican administrations.
Kurt Metzger, a former demographer and founder of Data Driven Detroit, said that even after years of Cassandra-like warnings, the state still lacks an “overall plan” to attack the population problem.
“The more coordinated we can be, the more parts of the puzzle we have from communities and the state and businesses, nonprofits and philanthropy, the more we can look at this holistically,” he said.
“There's opportunity to change these trends. They aren’t set in stone,” said Altarum’s Turner. “We can’t sit and wait.”
Covering the intersection of business and policy, and informing Michigan employers and workers on the long road back from coronavirus.
Thanks to Business Watch sponsor:
Support Bridge's nonprofit civic journalism. Donate today.
See what new members are saying about why they donated to Bridge Michigan:
- “In order for this information to be accurate and unbiased it must be underwritten by its readers, not by special interests.” - Larry S.
- “Not many other media sources report on the topics Bridge does.” - Susan B.
- “Your journalism is outstanding and rare these days.” - Mark S.
If you want to ensure the future of nonpartisan, nonprofit Michigan journalism, please become a member today. You, too, will be asked why you donated and maybe we'll feature your quote next time!