Our last post made reference to the Bureau of Labor Statistics report on “off shoring.” This has certainly been a hot topic as we see jobs go overseas because of globalization. However the Bureau of Labor Statistics report also shows certain types of jobs are more susceptible to being offshored. In this entry, we first analyze the relationship between these jobs and average salaries. Then, relying on data from Michigan’s Labor Market Information site, we look at how concentrated Michigan is in each of these occupations and where we are headed. This will give us a sense of how well positioned we are as more jobs continue to go overseas. More...
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With the automotive industry shedding jobs at an increasingly alarming rate, we are all too familiar with the term “offshoring”. Many of the manual labor jobs on the assembly line that were the staple of the Detroit economy have been sent overseas. Certainly, these are not the only jobs that are being sent overseas. The Bureau of Labor Statistics has even started to rate which occupations are most likely to get sent overseas. It is for this reason that we found CNN Money’s new online project “Assignment Detroit” which highlighted a case of “Onshoring” so interesting. Instead of sending jobs overseas, Rukmal Fernando (native of Sri Lanka) has brought a tech-company to Detroit from Sri Lanka. (See article here)
The interesting aspect of Fernando’s story is that, as an immigrant to the region, he is among the one group of people that are slowing the declining population in Southeast Michigan and he is trying to foster the entrepreneurial spirit by working to institute a business incubator in his office building. With more than 100 articles on business incubators (See business assistance), we have found that incubators can reduce the incidence of business failure and may lead to economic growth. Attracting residents like Fernando to the region, who will help shape the entrepreneurial atmosphere, should be among the strategies that Southeast Michigan vigorously pursues.
Experts assert that one of the positive effects of an economic downturn is the entrepreneurial spirit that is fostered. The New York Times on August 25, 2009 ran an article describing how these “…accidental entrepreneurs, unintended entrepreneurs, or forced entrepreneurs” have been moved to go into business for themselves. In fact, the article cites Shawn Achor who suggests that our creativity surges as we try to adapt to adversarial situations. If this is the case, Detroit should be in a constant state of creativity. We do, however, know that many municipalities and organizations have implemented programs that try to facilitate this entrepreneurial spirit. More...
Regional Economic Modeling Inc. (REMI) has sent us a link to the “Cash for Clunkers” WebEx Seminar we recently cited. Simply go to the Miscellaneous 2009 tab, and you will see the “Cash for Clunkers” post along with their other analyses and simulations.
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There has been a lot of talk recently about people leaving Michigan and Southeast Michigan. While most of this research has been on the state level, or focused on Wayne County specifically, the Center for Urban Studies (CUS) has analyzed recent data on the 7-county Southeast Michigan area.
In terms of Wayne County and Michigan, it has been recognized that we are losing population at a fast rate. In fact, Wayne County ranked first in the U.S. among all counties in terms of population loss. Unfortunately, much of the population loss is among more educated and higher paid individuals. It is estimated that those citizens who left Michigan took with them roughly $3.7 billion more dollars in paychecks than those coming in. More...
Tuesday, August 11, 2009 we had the opportunity to watch a webinar hosted by Regional Economic Modeling Inc. (REMI) on the economic impact that the “Cash for Clunkers” program would have on the economy. While they were demonstrating how their Policy Insight tool could be used to estimate such an impact, and therefore one may not agree with all of the assumptions from their presentation, it seems pretty clear that the Midwest will see a significant short-term impact in terms of income, population, and gross regional output. Their simulation estimated that 41,300 employees would be added to the Midwest region which would bring roughly $3 billion dollars worth of gross regional output. With a great deal of misinformation surrounding the benefits of the plan, it is nice to see that careful econometric simulations are taking place to estimate the total economic impact. While the webinar will be posted on the REMI site (www.remi.com) within a week, they shared with us the slides from the presentation.
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On Friday July 31st, the New York Times reported that the economy shrank less than expected between April, 2009 and June 2009, possibly signaling an end to the recession. They noted that businesses will not immediately begin hiring again however, prospects are looking upwards. While most will take shrinking losses, in this economy, to be a good thing, one wonders what solace it provides for Michigan and the Detroit area.
While programs like “Cash for Clunkers” may provide a temporary spike to Michigan’s auto industry, the future of the program is uncertain. The Detroit News reported that the U.S. House has passed a bill that would grant $2 billion more dollars to the program but some uncertainty remains as to when and if the Senate will pass the bill according to the Detroit Free Press. Despite the prospects of the Cash for Clunkers program, the auto sector appears to still be in a state of decline and jobs are still being shed.
It is pretty easy to see that the auto sector is trending downward and is being replaced, in part, by the service sector. More...
These numbers are easily recognizable to many people involved with economic development in Michigan: 9.5%, (15.2% as of today), 14.9%, and 24.7%. These are the unemployment statistics for the United States, Michigan, the Detroit-Livonia-Warren Metropolitan Statistical Area, and the city of Detroit respectively. While these numbers suggest a scary prospect, this map on slate.com gives a visual which is far scarier. While many are trying to determine when the economy will bottom out, two more numbers have been announced that make the prospects look even worse. More...
Members of the Detroit Region Aerotropolis signed the "Aerotropolis Development Corporation Inter-local Agreement" on June 17. This agreement created the Aerotropolis Development Corporation (ADC). For more information on this topic check out this press release.
According to the press release the ADC will:
Check out earlier posts below on this topic for more information on the Detroit Aerotropolis.
Aerotropolis Detroit
Aerotropolis Detroit II
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While the concept of an airport city or aerotropolis has attracted a lot of attention, what does the Detroit Aerotropolis mean for Southeast Michigan? Backers of the plan claim significant job creation and other economic impacts while detractors state that the aerotropolis will merely redirect development from other parts of the region. More...
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Economic Development
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We are the Center for Urban Studies Economic Development Unit. We have several authors who contribute directly and indirectly to this blog.
Lyke Thompson, Ph.D.
Director of the Center for Urban Studies and Professor in Wayne State University's Political Science Department, has specialized his research on the urban political and economic environment. A primary focus has been centered on municipal economic development, urban policy, and the determinants of economic growth.
Eric Stokan, MA.
Research assistant in the Center for Urban Studies Economic Development Unit. Serves as the lead researcher of the Unit, analyzing economic data and using various statistical techniques. Mr. Stokan is pursuing his Ph.D. in political science at Wayne State University and is interested in questions concerning municipal economic growth and industry mix as well as determinants of incentive adoption.
Mary Hennessey
Research technician at the Center for Urban Studies Economic Development Unit. Ms. Hennessey researches the effectiveness of local economic development incentives. Specifically, she has conducted a thorough investigation of brownfields and is currently working on public transit.
Amy Styma, MPA.
Graduate research assistant at the Center for Urban Studies Economic Development Unit. Ms. Styma researches the effectiveness of local economic development incentives. Specifically, she has conducted analyses of land banking, industrial parks and is currently working on land acquisition and condemnation.
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