Decrease in unemployment rate yet fewer jobs available

Michigan’s unemployment rate decreased from 7.1 percent in April 2007 to 6.9 percent last month — but state economic experts said it’s no cause for celebration.

April was the third consecutive month to show a decline in the employment rate, according to the Michigan Department of Labor & Economic Growth, or DLEG. Job losses in the construction and auto sectors were two of the main causes of the decline.

George Fulton, research professor of economics at the University of Michigan, said the labor force includes only the employed and the unemployed who are actively seeking work. The unemployment rate does not account for discouraged workers or those people who are working part-time, but would prefer to be working full-time.

“It’s actually the most looked at statistic when people are trying to determine what’s happening in the labor market,” he said. “But the change in jobs is what I use to determine what’s happening in the labor market.”

Major job losses have occurred over the past year in some industrial sectors, including a loss of 13,000 in construction, 8,000 in government and 53,000 jobs in the manufacturing sector, which includes the automobile industry.

Bruce Weaver, economic analyst for the DLEG, said the total job loss across all sectors between April 2007 and April 2008 was 72,000. An additional 19,000 jobs were lost between March 2008 and April 2008. “The jobless rate fell by two-tenths of a percentage point, but that decline was primarily based on a loss of jobs,” he said.

Todd Elder, an MSU economics professor, said most of Michigan’s economic problems are related to loss of jobs in the automobile industry.

“It certainly doesn’t seem like there’s a whole lot of employment growth in Michigan,” Elder said. “It’s hard to see when Michigan will turn the corner.”

Despite job losses in the state, some sectors have expanded.

Michigan has gained 4,000 professional and business jobs and 9,000 education and health service jobs over the past year.

“Those industries that have above-average education requirements grew in jobs between the years 2000 and 2007,” Fulton said. “Education is becoming increasingly important in future job markets.”

Ian Brown, an English junior, said the job losses in the state haven’t affected him or his family directly, but they have affected the lives of his friends and their families.

“I’m from the Detroit area, so a lot of my friend’s families are in the auto industry,” Brown said.

Many of the students Elder has encountered say they plan on leaving Michigan after graduation.

“Everybody seems to want to leave the state and that’s the problem,” he said. “The people in universities are the best and the brightest and those are exactly the people that you don’t want to leave.”

Brown said he isn’t sure where his career will take him.

“I think it makes sense to leave the state after you graduate,” he said. “That’s what a lot of my friends are doing.”

Published on Monday, May 19, 2008