Michigan's unemployment rate has dropped, but there's more to the story

Jan 24, 2014

Michigan's rate of unemployment has dropped to 8.4%.  A decline, even a small one, might be portrayed as good news.

But to put the number in perspective, you have to consider what the folks at the Bureau of Labor Statistics are measuring. The unemployment rate measures the number of people in the labor force that are out of work.

A measure of the buzzing bees

Think of the labor force as the number of people who have their worker bee wings buzzing. They're revved up and ready to work.

Some are working – collecting honey – bringing it home. But others simply can't find a flower where they can work.

The unemployment rate reflects the number of those buzzing bees who want to work, but can't find a job. The Bureau of Labor Statistics counts you as part of the labor force if you have actively been looking for work in the last month.

And Michigan's labor force took a serious one-two punch. The labor force is the blue line on this chart:

The blue line represents the number of worker bees available. The red line is the percent of worker bees who can't find work.
The blue line represents the number of worker bees available. The red line is the percent of worker bees who can't find work.

The first punch came with the serious decline in auto manufacturing. The chart above looks a lot like this chart, which shows the decline in the number of auto manufacturing jobs in the U.S.

Number of employees in auto manufacturing in the U.S.
Number of employees in auto manufacturing in the U.S.
Credit BLS

The second punch came from the deep economic recession of 2007 to 2009. Michigan is still recovering.

So we've still got a long way to go, and some say that one-two punch did permanent damage – that we might never see labor force numbers as high as they were prior to the decline in manufacturing.

For more on the latest unemployment number, listen to the great interview Zoe Clark did with Charles Ballard on Stateside yesterday.

Ballard talks about the importance of an educated work force in the state, and that he's encouraged by the moves to improve early-childhood education in Michigan.

"That won't bear fruit for many years, but it will bear fruit," said Ballard.