Stateside: Are you better off than you were four years ago?

Sep 13, 2012

Important signs are pointing to new life in Michigan's economy.

Brand-new reports tell us that Michigan's household income is up, foreclosure rates are down, and the poverty rate is down.

Some politicians and experts tell us the economy is beginning to bounce back. But here's the reality of the economic recovery: while jobs are available, they are not high-paying jobs.

Economist Dr. Charley Ballard of Michigan State University spoke to Cindy from East Lansing.

A report from the Michigan League for Human Services shows that 27-percent of Michigan workers are mired in jobs that can't get them above the poverty line.

Cyndy posed this question to Dr. Ballard, “How much of a recovery is it really, when nearly a million people in our state have jobs, but can barely earn a living?”

Ballard noted that there is a recovery going on, that the jobless rate has dropped to 8 percent from 14 percent a couple years ago, and there’s a similar recovery going on nationally.

But there is a long-term problem that needs to be addressed, Ballard said. It is something that’s been going on since not just the “Great Recesssion,” but for the past 30 or 40 years.

“The people at the middle and the bottom of the economic ladder in the United States have just not done well at all in the last four decades whereas those people at the top have just done spectacularly well,” he said.

So it’s not just a recovery question Ballard said.

“It’s a serious long-term issue where the U.S. is just not producing the kind of jobs that would necessarily feed a family very well for a large segment of our population.”

Cyndy wondered why this was the case.

At the top of the list, according to Ballard, are changes in the technology of our economy that have “rewarded those with a whole lot of skill and been detrimental to those without a lot of skill.”

“50 years ago it really was true that there were people who would tighten the same four bolts 107 times an hour and make a middle-class wage,” Ballard said.

These days that job can be done by a robot. Instead employers are looking for someone who can program that robot or ensure that it runs properly.

“If we wanted to keep the middle and lower parts of our population up, we would have to increase their skills a lot more rapidly than we have. We haven’t improved the education and skill of our population in a way that keeps up with the changing technology,” Ballard reported.

Cyndy noted that the 27 percent of people in low-paying jobs do not have much latitude to go out and seek job retraining.

“What could be the answer for people in this situation?” she asked.

Though he noted the difficulties, Ballard said that people really need to seek out that retraining. He cited Capital Area Michigan Works as one of many resources available across the state. 

Cyndy wondered if the impetus for solving this problem would come from the public or private sector.

“It’s got to be both,” said Ballard.

“One of the stories Governor Snyder has emphasized many times is that there are tens of thousands of jobs that are going begging. The employer has a job and can’t find anyone with the requisite skills,” said Ballard

“But it is the public sector where our K-12 education happens and that’s really crucial.”

While noting his obvious stake in higher education funding, Ballard noted, “The policy of systematic disinvestment in higher education we’ve pursued in the last decade or so is a mistake.”

He pointed out that as state support has plummeted schools have had to raise tuition.

Cyndy wondered how voters would interpret the state of the economy. She especially wanted to know how voters would respond to the question, “Are you better off than you were four years ago?”

Ballard said it was hard to say, but he notes that it was four years ago this week that Lehman brothers collapsed, and that the job market did not bottom out nationally until late 2009 and early 2010.

“A lot of people are worse off than they were 4 years ago but better than they were 3 years ago,” Ballard said.

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- Jordan Wyant, Michigan Radio Newsroom