Rick Haglund: An economic tsunami is hitting Michigan — and it will reshape work forever

June 10, 2020 7:05 am

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As businesses slowly reopen and workers return to jobs, President Donald Trump is predicting the economy will emerge from the COVID-19 pandemic stronger than ever.

“We’ve been talking about the ‘V.’ This is better than a ‘V,’ ” Trump said last week about the potential for a quick, V-shaped recovery. “This is a rocket ship.”

Larry Good isn’t buying it.

Good, a national leader in workforce development for nearly 40 years, says the pandemic will result in major, long-term changes in the economy that will require many workers to find new jobs and switch careers.

That means Michigan must respond by building an integrated higher education and adult worker training system, investing more in broadband internet and reinventing an unemployment compensation system that was never designed to protect workers from massive economic upheavals.

“This is an opportunity to reimagine everything about work and learning,” Good, CEO of the nonprofit Corporation for a Skilled Workforce in Ann Arbor, recently wrote. 

The pandemic has turbocharged trends already roiling the economy: online shopping, working from home, telemedicine, artificial intelligence and factory automation among them.

Experts say millions of jobs in retailing, hospitality, entertainment, manufacturing and other industries might never return. Almost 21 million U.S. workers were unemployed last month.

The economy fell into recession in February, following the longest expansion in U.S. history, the National Bureau of Economic Research said Monday.

Michigan lost 1 million payroll jobs in April alone — 22.8% of all jobs—the highest rate of job loss in the country. (May figures won’t be available until June 17.)

University of Michigan economists say that even if there is no second coronavirus wave and the federal government provides substantial aid to state and local governments, Michigan won’t recover all of its lost jobs until sometime after 2022.

“Even with these optimistic assumptions, Michigan’s economy is in for a very rough time,” they wrote in a May 21 forecast.

The pandemic has forced many major employers to rethink how they organize work in the belief that they cannot go back to the old ways of doing things.

General Motors CEO Mary Barra told an industry conference last week that the pandemic has forced GM to “look at every line item” and that the automaker “will come out of this with a lower cost system overall.”

When an automaker CEO talks cost cutting, it usually means fewer jobs.

Michigan is used to riding the auto industry roller coaster. But Good said we’re in the midst of an economic tsunami that should cause policymakers to rethink nearly everything about workforce development to make Michigan a more prosperous state for all residents.

A key component is higher education. Economic upheaval forced by the COVID-19 pandemic will make a post-secondary education more important than ever.

But universities and community colleges are facing unprecedented financial challenges and enrollment declines as the number of high school graduates plummets.

“I don’t worry about the University of Michigan or Michigan State University,” Good told me. “But if I’m a regional university or community college, I’m doing a lot of rethinking right now about my business model.”

Those institutions need to consider compressed academic and credential programs, and more online learning opportunities, he said. The latter will require a bigger investment in broadband internet, which is unavailable in many Michigan communities. 

When I spoke with Good on the phone last week, he was working from his Ann Arbor office because, ironically, he can’t get high-speed internet at his home outside Saline in tech-savvy Washtenaw County.

Michigan also will need a lot of money, much of it from the federal government, to help workers transition to a changed economy. But incredibly, some powerful lawmakers and conservative groups are opposed to such aid for the states.

If there’s one reason to be optimistic, it’s that major “sea change moments” like wars and pandemics usually spark major innovations that provide long-term economic, employment and societal benefits, Good said.

The New Deal, which arose out of the Great Depression, created Social Security, bank deposit insurance and labor protections, among other programs.

Computers, jet engines, penicillin, radar, Jeeps and the G.I. Bill were among innovations that came out of World War II.

Michigan desperately needs to become more innovative in restoring its economy. It’s in the bottom tier of states in a variety of crucial measures, including per-capita income, educational achievement and labor force participation.

Plus, we have too many workers, often people of color, stuck in low-wage jobs. Many of those jobs, such as grocery store clerks and nursing home aides, became essential in the pandemic.

“Michigan has been a hot spot for settling with people piecing together jobs that pay minimum wage,” Good said. “We’ve got to work with industry on the reinvention of jobs that pay higher wages.”

The COVID-19 pandemic has exacted a horrible price on the health and economic lives of Michigan residents. 

But this crisis also provides an opportunity to design a new Michigan economy that’s more prosperous and sustainable than the one that just blew up. 

The question Good asks is: Can we think big enough? 

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Rick Haglund
Rick Haglund

Rick Haglund writes the "Micheconomy" column for the Michigan Advance. He's a former reporter and business columnist for Booth Newspapers, now the MLive Media Group, with extensive experience covering Michigan’s economy and the auto industry. He now works as a freelance writer based in Southeast Michigan.