Michigan Economic Recovery: College Grad Retention
Where do we go from here? Well to some the outlook in Michigan is as bleak as a winter sky. However, the key to Michigan’s economic recovery from globalization’s effect on the manufacturing industry is college graduate retention.
[Throw grad cap in the air]
As a college student majoring in Economics and a Michigan resident, I anticipate our continued residence is needed and that in doing so it will benefit our self interests. In order to see this we must look at Michigan’s current situation, the affect that graduates have on economies at the state and local level, and finally how it will benefit us as future graduates to aid in our recovery.

Let us start with what we know. According to the Michigan Economic Development Corp. 2001 Michigan ranked #1 and #2 in US car and light truck production respectively. While we still hold that title, the “Big 3” has lost a foothold on some of the market share. Contrary to popular belief that our manufacturing is being “shipped overseas”, our actual competition is right her in the good ol’ US of A. Foreign car manufacturers have placed large plants throughout the South due to the absence of unionization and our resistance to competition within the state.
US Dept of Commerce Bureau of Economic Analysis
Michigan 2000- 2006
employment:
2000- 5,629,498
2006- 5,542,222
Loss of 87,276 jobs or -1.6%
US 2000-2006
Full and Part time employment:
2000-166,758,800
2006-178,332,900
Gain of 11,574,100 or 6.9%
Only state to go down year by year from 2002-2005 in percentage of contribution to US GDP and in 2006 it recorded the only loss out of all 50 states
However, Michigan is not a complete economic quagmire because we produce some of the best college graduates in the nation. According to the US World News and report University of Michigan ranked 11th in top business graduate entrepreneurship programs. This means that there are very bright students graduating right here in this state that can breath fresh life into a stagnate economy by creating innovative start-ups. U of M also broke the top ten in Medical Schools. Michigan has two fantastic Universities in Michigan and Michigan State. A stat on the Michigan Economic Development Corporation website ranks us 4th in the nation with 6,500 engineering degrees awarded annually. This state is an educational industry in itself. Until recently, we maintained a balanced ratio of college graduates entering and exiting the state. Kenneth Darga, a Demographer for the state, says that the media has prescribed 5 fallacies about Michigan that the world has swallowed. He includes the perception of a “Brain Drain” as one of those five. Mr. Darga challenges the idea, but gives credence to a recent trend in 2005 and 2006 that has tipped the ratio towards a substantial exiting of our graduates.
Michigan is currently working on several stimulus incentives to promote economic growth. They are looking to diversify into alternative energy, life sciences, homeland security and defense, and advanced manufacturing. The state is investing $2 billion dollars into this 21st Century Jobs Fund Initiative with the hope of drawing in corporations and start-up business. Other plans include tax incentives, development in virtually “tax free” Renaissance Zones and Renewable Energy Zones. While these are great incentives for future business, there is not a specific plan in place to prevent an Exodus of the skilled labor force that is needed to maintain them…
Transition: In a moment I’ll tackle that issue, but for now I’d like to switch gears and address the affect that graduates have on economies at the state and local levels.
A study done by Michigan Future, Inc., an Ann Arbor think-tank collected data from states and the 53 metropolitan areas with population of one million or more plus Lansing and Madison. They found that almost all states with the highest per capita income:
• Are over concentrated compared to the nation in the proportion of wages coming from knowledge-based industries (those where more than 30% of workers have a four-year degree or more)
• Have a high proportion of adults with a four-year degree or more
• Have a big metropolitan area with even higher per capita income than the state
• And, in that big metropolitan area, the largest city has a high proportion of its residents with a four-year degree or more.
-Rich Karlgaard, publisher of Forbes magazine, summed it up best:
Best place to make a future Forbes 400 fortune? Start with this proposition: The most valuable natural resource in the 21st century is brains. Smart people tend to be mobile. Watch where they go! Because where they go, robust economic activity will follow.
Transition:
The transfer from a commodity economy to a knowledge-driven economy has a simple fix. It is one that requires our involvement.
The solution is merely (something my mom used to tell me…) STAY PUT! Michigan needs you, the community needs, we need you. Without the retention of our college graduates the economic stabilizers set in motion will crumble like rotted wood. However, we can start small by create a network that will weave a safety net of creative, educated, and motivated individuals. Who knows we could end up a large consulting firm that breaks down into specialized industries and takes on R&D, Project Management, or any other outsourced project. We can develope these knowledge based fields of information; finance and insurance; management of companies; professional and technical services; health care and education. The possibilities are endless once people combine their strengths. There is plenty of potential growth for Michigan because we are on the bottom looking up! We have endless intellectual resources at our fingertips at the ever improving universities. Our networks will continue to grow as we continue in our education. It is in our self interest to develop them here. This will attract the large corporation to us instead of shelling out precious tax dollars. We have a comparative advantage over any graduates coming from warmer climates. Businesses will have to pay them more in order to get them to move here. It is also in our best interest to stay here and help develop the communities we grew up in. There is nothing better than to see your town or city sprout economic wings and fly. Our careers will flourish after starting from ground zero and we will become increasingly marketable. So consider the state of Michigan as your home.
I want to leave you with this thought; that we as graduates can come together and help Michigan recover. It’s been shown that when educated minds combine they will drive the future of their surroundings into the sunset of prosperity. We can fulfill our self-interest through the interests of others. I will be the first to tell you my move from Grand Rapids to Atlanta was one of the most enlightening periods of my life. Experiences cannot be supplemented with a dream. If you must leave, travel, and stay where like, but remember where your home is…. AND Y’ALL COME BACK NOW YA HEAR?

Citations

Braun Kenneth M. &LaFaive Michael D., Mackinac Center, “Automotive Production Expands – Elsewhere”, http://www.mackinac.org/article.aspx?ID=9228

Darga Kenneth, State Demographer, Michigan Revenue Estimating Conference, January 11, 2008,”Fallacies that Misinform Our Thinking About Michigan’s Population and Economy”

Glazer Lou &Grimes Don, Michigan’s Transition to a Knowledge-Based Economy: First Annual Progress Report, Report from: Michigan Future, Inc., February 2008 http://www.michiganfuture.org/Reports/ProgressReport2008Final.pdf
Michigan Economic Development Corporation, The Michigan Advantage:Excellent Education, Copyright © 2008
http://www.michiganadvantage.org/MIAdvantage/Excellent-Education/Default.aspx
University of Michigan Medical School ranks among top 10 in country in U.S. News & World Report, March 30, 2007, http://www.med.umich.edu/opm/newspage/2007/usnewsmedschool. htm
US Dept of Commerce Bureau of Economic Analysis, Interactive Charts and Graphs, http://www.bea.gov/regional/index.htm,