Stagnant Population, Shrinking Economy Bode Ill for Michigan’s Future, Studies Warn

Michigan Gov. Gretchen Whitmer speaks at Ford's press conference announcing its partnership with Chinese EV battery maker to create a new EV battery park in Marshall, Mich., on Feb. 13, 2023. Bill Pugliano/Getty Images

 Michigan’s Democrat Governor Gretchen Whitmer’s potential place on her party’s presidential ticket may be threatened after a pair of studies showed her state is in population and economic freefall.

After her easy reelection in November 2022, Whitmer has been talked about as a possible replacement for Vice-President Kamala Harris or as a strong candidate for president should Joe Biden drop out of the race.

All that may be jeopardized by studies conducted by the privately funded, nonprofit Citizens Research Council of Michigan (CRCM) and Altarum, a nonprofit, quality-of-life research organization.

The two organizations combined their findings and published a series of reports in May.

For the purposes of this article, the reports will be referred to as “the study.”

Sen. Kamala Harris (D-Calif.) (L), Michigan Gov. Gretchen Whitmer (2R), former Vice President Joe Biden (2L), and Sen. Cory Booker (D-N.J.) (R), at a campaign rally at Renaissance High School in Detroit, Mich. on March 9, 2020. Scott Olson/Getty Images

The study said that Michigan “has fallen behind other states in population growth, jobs, earnings, health, educational achievement, and the quality of public services.”

The research also found that Michigan is relatively poor when compared with the average state, ranking 34th of 50 in both real per capita personal income and real median household income as of 2021.

The latest data for 2022 ranks Michigan 38th in personal per capita income, 13 percent below the national level.

In terms of workforce participation, Michigan ranks in the bottom 10 of the 50 states.

Less Educated Population

Michigan also ranked 34th in the percentage of its 25 and older population that held either a two or four-year college degree.

The study said the state’s high school graduates are not meeting college readiness standards and in 2022 those in grade 4 and grade 8 scored below the national average in math and reading.

“Absent policy changes and investments, Michigan’s current path will lead to a shrinking population and continuing declines in the state’s competitiveness and quality of life,” the study said.

On June 1, 2023, Whitmer issued an executive order creating a 28-member commission composed of government officials, business leaders, academics, and social activists tasked with reversing, or at least stabilizing, the dismal demographic trajectory of the past 50 years.

The CRCM study found that from 2000 to 2020 Michigan grew more slowly than all but one state. The trend is projected to continue for the next 17 years, until about 2040 when the state’s population will start to shrink as deaths begin to exceed births.

With large numbers of young people leaving the state in search of better opportunities, the study projects that by 2030 the working-age population (18 to 64) of Michigan will shrink by 150,000 people, while the retirement-age segment will increase by 450,000.

“These population trends will affect the talent pipeline, the level of employment, the demand for goods and services, the tax base and fiscal environment, and the potential for growth over the next decade and beyond,” the study said.

Former Industrial Powerhouse

In the early 20th century, Michigan became the automobile manufacturing capital of the world, with Detroit, its largest city, earning the nickname “The Motor City.”

For decades the prospect of good-paying jobs in the auto industry drew people from all over the country to the Great Lakes State.

During the 1940s, Michigan converted its formidable manufacturing base to wartime production with the state being dubbed “The Arsenal of Democracy.”

According to the study, strong population and economic growth continued from 1940 through the 1960s, making Michigan the nation’s seventh most populous state.

Through the 1970s and 1980s free-trade policies brought about a sharp jump in the number of foreign-made cars imported into the United States, resulting in the gradual shrinking of Michigan’s manufacturing base. Wages and benefits declined and thousands of jobs were lost.

These factors contributed to a slowing and then leveling off of the state’s population growth.

Jim Farley (L), CEO of Ford; Bill Ford (C), executive chairman of Ford Motor Company; and Michigan Gov. Gretchen Whitmer (R) announcing at a Feb. 13, 2023, press conference in Romulus, Mich. that Ford will be partnering with a China-based company to create an electric-vehicle battery plant in Marshall, Michigan. Bill Pugliano/Getty Images

As more people began moving out of the state than moving in, the 1980 census showed Michigan had dropped to the eighth most populous state.

By 2023 the state dropped to 10th.

According to the study, the state’s population actually declined at a rate of 0.3 percent per year from 2004 to 2010.

The signing of the North American Free Trade Agreement in 1992; China being given most-favored-nation trade status in 2000, followed by the 2001 acceptance of China into the World Trade Organization and its designation as a “developing nation,” combined to trigger a mass closing of Michigan factories, resulting in the loss of thousands of jobs.

“In 1990, manufacturing jobs made up 25 percent of employment; by 2021, that percentage had dropped to around 16 percent.

“The result of this 30-year transition is that Michigan slowly saw employment shift from higher-wage to lower-wage employment sectors,” the study showed.

Electric Cars Will Cost Jobs

The study said that the ongoing shift away from gasoline-powered to electric-powered vehicles reduces the production hours required for each unit by 30 percent.

Gasoline-powered vehicles contain 30,000 components, while electric vehicles have about half that many.

These two factors have caused the further loss of jobs among automakers and their network of small parts manufacturers—a trend that is expected to accelerate.

From 2000 to 2020 West Virginia was the only state to fare worse than Michigan in maintaining its population. The Mountain State posted a loss of one percent of its people, while Michigan only gained one percent.

This occurred at a time when America’s total population grew by 18 percent.

During the pandemic years of 2020 and 2021, Michigan’s population went down. It also declined in 2022.

The state’s political clout based on the number of seats in the U.S. House of Represents plummeted from 19 congressmen in 1970 to 13 in 2020.

This reduced the number of the state’s Electoral College votes from 21 to 15 during the same time period.

Fewer Students, Workers

Between now and 2030, the current number of children in Michigan (2.15 million) is projected to fall by 110,000, or about five percent.

The impact on K–12 education of the declining number of children has already posed difficulties for many local, public school districts, whose state funding is based on a per-pupil formula.

The working-age population is projected to decline by more than 160,000 people (2.7 percent) by 2030, begging the question of whether there will be enough people around to care for the increasing numbers of elderly.

Fewer working-age people employed in the already staff-strapped healthcare industry could mean greater shortages of nurses and other caregivers as the elderly population rises.

As a result of an aging population, it is projected that Michigan will be home to half a million more retirees in 2050 than in 2020.

Between 2020 and 2040, the population over 65 will rise by about 30 percent.

The steep increase in the number of elderly people is not being offset by the hundreds of Michigan retirees moving permanently to Florida each year, the study said.

Older, Sicker, Poorer

CRCM researchers wrote, “Michigan is an older than average state and so will see the impacts of an aging population ahead of much of the nation.”

Michigan’s real estate market could also suffer due to a lack of demand on the part of the shrinking working-age population.

Because more people are expected to continue to move out of Michigan than move into the state, the net loss of people will exceed 270,000 over the next 30 years, the study said.

According to the study, Michigan gains about 20,000 people per year from international migration. This represents about two percent of the total number of legal immigrants arriving in America annually.

Efforts to provide housing for the influx should be accelerated and more resources must be allocated to English language instruction, as part of a plan to make Michigan more attractive to foreign immigrants, according to the study.

Making Michigan an LGBT-friendly place, as well as embracing a youth-friendly social agenda, are seen as positive ways of attracting young, educated move-ins from other states to build up the workforce and boost the population.