Thursday, March 3, 2005

Michigan continues to shed jobs

Unemployment rate nudges down to 7.1% as more people stop looking for work.

By Karen Dybis / The Detroit News

Error processing SSI file Comment on this story Send this story to a friend Get Home Delivery

Michigan's unemployment rate declined slightly in January, but the improvement did little to allay concerns about the state's economy and its continued loss of manufacturing jobs.

The state's jobless rate dropped to 7.1 percent for the month, down from December's revised rate of 7.5 percent, which could mark the worst in the nation for that month, according to a report Wednesday by the Michigan Department of Labor & Economic Growth.

December originally came in at 7.3 percent, putting Michigan in a tie with Alaska for the highest unemployment rate nationwide.

Despite the improvement, Michigan's economy continues to sputter with an overall unemployment rate nearly 2 percentage points higher than the national rate of 5.2 percent.

In Metro Detroit, more than 153,000 people are unemployed.

"It's horrible. I can't find a job anywhere," said 43-year-old David Rodriguez of Troy. The divorced father of three has been out of work for a year despite his experience as a journeyman meat cutter and apprentice electrician.

"I applied for a job with Meijer three weeks ago, and there has been no response. They told me during the interview I was overqualified."

Meijer did mention it had other job openings at its new stores, Rodriguez said, but those positions pay about $7.50 compared to the $17.50 he could make as a meat cutter.

Overall, the state had about 6,000 fewer payroll jobs in January than in December, according to a survey of employers. The loss of jobs, though, doesn't translate to a higher jobless rate because the state considers people who have stopped looking for work and other factors.

Losses included 8,000 manufacturing jobs and 12,000 professional and business sector positions, which include highly trained and compensated employees such as consultants and engineers.

On the plus side, the retail trade gained 11,000 jobs, while the trade, transportation and utilities sector picked up 8,000 workers.

"The good news is January got better. The bad news is we got worse than we thought in December," said Patrick Anderson, principal of Anderson Economic Group, an economic consulting firm in Lansing.

The state's January jobless rate decline was the first monthly decrease since April 2004, noted Bruce Weaver, acting director of the state Bureau of Labor Market Information and Strategic Initiatives.

For the past 12 months, the total number of people with jobs in Michigan increased by 17,000 or 0.4 percent. The national gain was 1.3 percent.

Michigan's overall jobs picture is troubling, Anderson said. Wednesday's report showed losses in major industries for all of 2004. For the year, Michigan lost 23,000 manufacturing jobs, 8,000 professional and business service jobs and 2,000 information jobs.

The state finished the month with 682,000 manufacturing jobs, down from more than 900,000 five years ago.

"Established employers continue to shed jobs in late 2004 and into 2005," Anderson said. "We're concerned because there is growth in government and education employment, while the private sector is declining."

Michigan is experiencing a brain drain, said Mark Angott, president of Angott Search Group, a Rochester Hills executive search firm that specializes in industries like manufacturing and engineering.

"We're having a hard time attracting that highly educated person to come to our state. More seem to be leaving than coming," Angott said, perhaps driven away by the state's sluggish economy and job losses from outsourcing and plant closures.

While Angott's business is doing well, he has noticed a disconnect between Michigan's outlook and the rest of the nation.

"You have manufacturing jobs leaving, but we haven't come up with an industry to replace it with," Angott said. "It all comes down to the fact that we really haven't diversified from the automotive industry."

The state's jobless numbers have stagnated near the 7 percent mark since 2003 in part because of its reliance on the troubled auto industry, said Carl Tannenbaum, chief economist with LaSalle Bank in Chicago.

"Michigan will not see its unemployment rate go down to the national average until the strategic and economic fortunes of the big automakers are better defined," Tannenbaum said. "A lot depends on how they handle the challenges they are facing."

You can reach Karen Dybis at kdybis@detnews.com or (313) 222-2319.