Updates About Economy

Governor Whitmer touted Michigan’s strong job growth with the addition of 27,000 jobs in Fiscal Year 2024, signaling ongoing economic expansion. The construction sector reached a two-decade high, employing over 200,000 people, while Michigan’s labor participation rate rose above 62%—its best level since 2009. Key data from the Department of Technology, Management and Budget (DTMB) shows Michigan’s unemployment rate at 4.5%, with average manufacturing wages up 5% year-over-year, outpacing inflation.

The Governor has pursued several initiatives to fuel this growth, including $21.3 billion in clean energy and battery projects, a $500 million Make it in Michigan Fund, and a new Innovation Fund to foster local businesses. These efforts have contributed to Michigan’s leadership in the auto and clean energy sectors, record construction employment, and rapid small business growth, making the state a top performer in job creation and business climate.

In April, unemployment rates fell in 15 of Michigan’s 17 labor market areas, according to the Department of Technology, Management and Budget. Prior to this spring, all 17 areas experienced a year-over-year increase in unemployment, with a median rise of 0.5%. However, beginning in April there was a median decrease in unemployment at a rate of 0.2%, with rates ranging from 3% to 6.8%. The largest reduction was in Northeast Lower Michigan, while Flint and Muskegon saw no change.

Over the past year, employment rose in 14 markets, with a median increase of 1.2%, and Niles showing the most growth. Unemployment rate reductions were noted in 68 of 83 counties, with Livingston County having the lowest rate of unemployment at 2.5% and Mackinac County with the highest at 14.3%. The Upper Peninsula saw the biggest decrease in labor force levels at 1.1%, but there was a median decrease of 0.7% across the state. The sectors with the most added employment opportunities were professional and business service industries and construction.

Governor Gretchen Whitmer and Michigan Legislators are bracing for potential upheaval should the state’s minimum wage law be invalidated by the Michigan Supreme Court. If the court strikes down the existing law, which allows tips to count towards minimum wage, Michigan could see its minimum wage potentially rise to over $13 per hour. Advocates for the wage increase, such as One Fair Wage, believe an increased wage is essential to filling low-wage job vacancies. However, critics in the hospitality industry worry that the prices of food and beverages will rise and layoffs may occur due to restaurant labor costs increasing by 250%. The fate of Michigan’s paid sick leave law also hangs in the balance.

Whitmer and State Lawmakers are considering their options, weighing the need to uphold the spirit of voter initiatives while ensuring the viability of small businesses. Worker advocates are pushing for further increases in the minimum wage to $15 by 2027, while industry representatives emphasize the importance of retaining the tip credit system. The court’s decision, expected by the end of July, could have far-reaching implications for Michigan’s economy and political landscape.