MSU REPORT: MICHIGAN EXODUS WORSENS ECONOMIC CHALLENGES



Author: S. Adelaja and J. Kinch Date: 12/1/2009


Michigan State University

Contact: Soji Adelaja, Land Policy Institute: (517) 432-8800; John Kinch, Land Policy Institute: (517) 432-8800, Ext. 111, kinch@landpolicy.msu.edu  

For Release December 1, 2009

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MSU Report: Michigan Exodus Worsens Economic Challenges

EAST LANSING, Mich.--The thousands leaving Michigan in search of better opportunities are more than casualties of the state's depressed economy, Michigan State University researchers say. Emigration deepens the state's malaise as well.

"When people leave town, so does their economic activity," said Soji Adelaja, lead author of a new study charting the impacts of Michigan's population loss and director of the Land Policy Institute at MSU. "This is especially true in a service economy, which depends upon people providing and needing services. The impact of these departures cuts deeper into the economy."

Michigan has lost more people each year as jobs evaporated, with 9,388 fewer in 2005; 34,088 in 2006; and 46,368 in 2007.

Sixty-three out of 83 Michigan counties lost population between 2000 and 2008, especially urban counties. The outflow represents a loss of 15,855 jobs and $1.9 billion in economic output, Adelaja and colleagues estimated. In addition, the state lost $585 million in labor income, $346 million in property income and $2.49 billion in home equity value.

Much of the population decline was triggered by manufacturing job losses, especially from the auto industry in southeastern Michigan. Wayne County lost more than 100,000 residents out of approximately 2 million, or one in 20 people between 2000 and 2008. Not all left the state--some simply moved to other counties. But Wayne County's exodus of residents (111,232) for this period was second only to Orleans Parish in Louisiana (172,821) following Hurricane Katrina in 2005. From 2006 to 2008, Wayne County charted the highest population loss per year in the nation.

"Such population loss can mean an economic vortex for a city like Detroit," said Adelaja, who is the John A. Hannah Distinguished Professor in Land Policy at MSU. "Fewer people mean fewer tax revenues to provide city services. Fewer city services mean lower quality of life for people. So people are faced with tough decisions: Stick it out, or leave."

Attracting desirable groups into such metropolitan areas should be a key strategy, according to Adelaja. Those groups include young "knowledge workers," educated immigrants and entrepreneurs who can leverage Michigan's assets--an emerging renewable energy industry, a skilled work force, research universities and affordable urban properties.

"We need to consider those critical assets we do have here, and we need to develop these with an emphasis on creating quality places where people want to move to and live," Adelaja said.

Foreign populations also should be targeted, the report advises, noting "immigrants also tend to be more prolific in creating jobs than their average non-immigrant counterparts. Special consideration may need to be given to attracting high-net-worth foreign investors by leveraging the EB-5 visa provision to recruit wealthy immigrants." Immigrant investors can use EB-5 visas to obtain permanent residency cards.

Other revitalization strategies include deliberately shrinking urban areas and promoting tourism. The report, "The Economic Impacts of County Population Changes in Michigan," is part of an ongoing series of "new economy" reports published by LPI. Summary and full reports are available at LPI Publications.

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The MSU Land Policy Institute focuses on research and outreach related to land use and strategic growth. The Institute, founded in 2006, delivers innovative solutions, transitioning knowledge from land use experts to the community.

Michigan State University has been advancing knowledge and transforming lives though innovative teaching, research and outreach for more than 150 years. MSU is known internationally as a major public university, with global reach and extraordinary impact. Its 17 degree-granting colleges attract scholars worldwide who are interested in combining education with practical problem solving.

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