Michigan at a Crossroads

The uncertainty and economic instability brought on by the Great Recession created an era of crisis management and reactive public policy. Unfortunately, this often meant that the important task of day-to-day governing and managing state affairs was cast aside and pro-active public policy was sacrificed. The result was a growing set of public policies that no longer meet the needs of a changing Michigan and a disinvestment in the state’s economic infrastructure.

A poorer and older state emerged from the Great Recession. Older Michiganders who had lost much of their savings in the financial crisis delayed retirement in large numbers. Other seniors who had already retired suddenly found a need to return to work. This has had a significant effect on a beleaguered job market, having a significant impact on new entrants to the labor force, particularly young adults. Communities also struggled with the implications of an older population and its impact on housing, healthcare, mobility and other public goods.

While federal and state workforce policy made attempts to adjust to meet the needs of Michigander’s to be retrained or reemployed, the policies were not as easily or quickly as adapted as was necessary. The economic downturn brought attention to the future workforce as well, recognizing a need for improved educational outcomes for Michigan students. Data has indicated the inadequacy of current efforts and the rate at which our students struggle with educational attainment appropriate for their grade level.

During this time, the labor market favored employers who were able to readily find qualified workers at bargain prices and workers were willing to accept most opportunities, even if it resulted in underemployment. This change to the labor market made it increasingly difficult for workers without a post-secondary credential to gain meaningful employment and contributed to an erosion of wages. The health and economic security of Michigan families remains in question today as nearly 40% of the state’s population lives in or near poverty. While state and federal policymakers sought and supported changes to welfare-to-work policies and the social support system, they have proven to be insufficient to stabilize many Michigan families.

The economic infrastructure of our state also failed to receive the attention it needed during the recession. The lack of available funding and attention to maintenance of current assets led to a concerning and prolonged disinvestment in critical state assets. Access to broadband, Internet, and other critical communications infrastructure is lagging far behind what is needed to compete in today’s global economy. Schools and municipalities across the state continue to face crushing legacy costs that threaten their solvency, which have been exacerbated by a continued decline in revenue sharing payments from the state. As a result, local infrastructure for transportation, public services such as water and sewer and other such services has become a potential threat to public health and safety.

As Michigan’s economy began to improve, public officials began to work toward addressing the challenges that resulted from the Recession. In 2013 and 2014, the State of Michigan helped to guide Detroit through the nation’s largest municipal bankruptcy, assisting it with a restructuring that would help it move forward on sound financial footing. Recognizing the extraordinary burden that the cost of health insurance places on Michigan families, the state took advantage of the federal Affordable Care Act and expanded Medicaid to poor, working families and created a federal-state partnership exchange where Michiganders can purchase health insurance on an open market using federal tax credits to defray costs.  In addition, to assist at-risk families and improve long-term educational outcomes, Michigan lawmakers approved the largest increase in spending on early childhood education of any state in the nation. Pubic officials have also attempted to improve government solvency, address infrastructure needs and invest in programs that work with varying results.

While a number of efforts were met with approval, many others did not find agreement or support and remain unaddressed yet today. Much has been done but much remains to do. Challenges remain in each key area of policy – human services, health care, public safety, economic and workforce development and more. The recession did not create these challenges in many cases but it did divert attention from them, resulting in damaging delays by public officials to respond with sound policy and management strategies.