Michigan must reform its spending

Michigan must reform its spending
Detroit News/July 8, 2009


It's hard to think about a report that projects another 311,000 jobs lost in Michigan over the next 18 months as good news. But at least the latest economic forecast from the University of Michigan sees an end to this long, dreadful slide.

The U-M forecasters say the job losses will continue this year, begin slowing early next year and by the end of 2010 should be stabilizing. If the economists are right, 2011 will bring moderate job growth to Michigan.

But the new job creation won't lift the state to anywhere near where it was in 2000, when this decline began. The reality is that when Michigan finally hits bottom next year, it will stay there for many years to come.

Michigan is still a state that is under-skilled and undereducated. Most of the economic recovery will be centered on knowledge-industry jobs that Michigan's work force is not prepared to compete for. During this downturn, Michigan has slashed education funding and support for colleges and universities.

That was a poor choice considering that the demand for skilled workers is expected to grow coming out of the recession. Before Michigan can significantly grow again, it must get serious about educating its citizens.

The state also has failed to adjust the size of government to its shrinking economy. The U-M report should provide new impetus to do so. Things aren't getting better soon. Economic growth will not wipe out the structural deficit. Michigan has to reform spending and figure out how to thrive as a state with fewer people, fewer businesses and far less tax revenue.

Michigan must accept that reality and get to work reshaping the state to fit its new economic model. It will be a smaller state, but that doesn't mean it can't be prosperous again.

But to get there, it must clean up its infrastructure and prepare its people to work in the 21st century.

Posted on Wednesday, July 08, 2009 (Archive on Wednesday, November 11, 2015)
Posted by rcline  Contributed by rcline