Thursday, June 16, 2005

Michigan sees more jobs slip away

Gap with nation widens as state's jobless rate nudges up to 7.1% and 15,000 jobs disappear.

By Nick Bunkley / The Detroit News

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Michigan's unemployment rate rose slightly to 7.1 percent in May as 15,000 jobs disappeared at a time when the rest of the country has been posting employment gains.

The state's jobless rate, which has edged higher for two consecutive months, is now 2 percentage points above the national average of 5.1 percent, according to state employment data released Wednesday. The gap in April was 1.8 points.

"These numbers speak of a state in crisis," Lansing economist Patrick Anderson said. "It's not just we're going the wrong way. We're at the bottom and headed downward."

The state's prolonged jobs slump is taking a toll on people like Ammed Hassan, who spends many of his days at the Michigan Works career center in his hometown of Oak Park searching for computer installation and repair jobs.

Plenty of companies need a few hours' worth of help, but he hopes to get into a longer-term contract that can give him a steady paycheck for months at a time.

"I would love to have a punch-in job where I can get benefits, but they don't exist anymore," said Hassan, 42. "Everything is farmed out. Right now, I have to eat, so I don't have a choice."

Overall, the state has lost 31,000 nonfarm payroll jobs in the past year, according to a survey of employers.

A separate survey of households, which picks up more part-time workers, self-employed residents and independent consultants, showed an increase in total employment of 42,000 since May 2004, a 0.9 percent gain but still lagging the 1.9 percent rise nationally during the same period.

Waiting for better times gets frustrating quickly for those seeking work.

Joyce Dowedite, who was laid off May 1 after 13 years as a secretary and office manager at a family-owned cabinet-making company in Livonia, devotes between five and eight hours a day, four days a week, to her job search.

This week, Dowedite has churned out eight resumes and had one interview, with another planned on Friday. She cleans a house one day a week to make extra cash.

"I'm on the Internet constantly, looking and searching for something," said Dowedite, 56, of Livonia.

"I try to stay encouraged and stay trusting that things will work out. But there are times when I get very down and the anxiety gets quite high."

The bleeding in Michigan goes well beyond factory work. In fact, manufacturers added 2,000 jobs in May, after cutting 22,000 positions in the previous 11 months.

About 15,000 jobs were eliminated since May 2004 in professional and business services -- a field that includes management and technical consultants, accountants and engineers. Nationally, that's the fastest-growing sector, gaining 444,000 jobs in the same period, according to the U.S. Bureau of Labor Statistics.

Through the first five months of 2005, total employment in Michigan is at its highest level since 2001, according to the state Department of Labor and Economic Growth. But because the number of available workers has also increased, the jobless rate has hovered around 7 percent for more than two years.

"That's getting to be a long time," said Michigan State University economics professor Charles Ballard. "It becomes more and more difficult to say we're going to snap out of it next month, because that idea has been shown to be wrong so many times in the past year."

Michigan would need to gain about 100,000 jobs to reduce unemployment by 2 percentage points and catch up to the national average. A recent forecast by the University of Michigan projects the state will add 37,600 jobs by the end of 2006.

Adding uncertainty to the picture is last week's announcement by General Motors Corp. that it would cut 25,000 jobs and close some plants in the next three years. It's not known how many Michigan workers may be affected.

The struggles of GM and the rest of the auto industry have rippled throughout Michigan's economy, creating less demand for other workers and reducing the state's tax base. The state lost about 5,000 government jobs in May due to larger than normal work force reductions at public universities.

Another 4,000 positions were eliminated in leisure and hospitality services, although that sector has performed best over the past year, with a net gain of 6,000 jobs.

"Thank goodness people are vacationing in Michigan and continuing to eat out," said Anderson, principal of Anderson Economic Group. "That's the only bright spot we have."

The sheer number of job seekers means many recent college graduates are still hunting for work. But Lynne Sebille-White, assistant director of the University of Michigan's Career Center, said the market does seem to be improving.

The number of students getting interviews on campus was up 17 percent this year, she said, and 8 percent more employers recruited at job fairs. Some firms that stopped recruiting on campus several years ago have started to return.

"Certainly things are not where they were at in '99 and 2000," Sebille-White said, "but I think things are gradually making progress."

Finding work is often more difficult for people who aren't fresh out of college and end up on the market after being laid off. John Almstadt, manager of Oakland County's work force development division, said jobs are available, but many require more technical skills than most candidates possess.

"Our challenge as work force professionals is to qualify our customers for those jobs," Almstadt said, "particularly as they transition from those high-wage, low-skill jobs that we had been blessed with for a number of years, which are disappearing."

Detroit News Staff Writer Sharon Terlep contributed to this report. You can reach Nick Bunkley at (313) 222-2293 or nbunkley@detnews.com.