Michigan marks lowest unemployment rate in past 20 years: report

Michigan’s labor market is continuing to show improvement, according to a new report from the Michigan Center for Data and Analysis, with initial data for 2024 pointing toward continued progress on unemployment and jobs following the COVID-19 pandemic.

The 2023 Michigan Economic Analysis Report examines Michigan’s performance through various economic indicators, noting that 2023 marked the state’s highest payroll job level and lowest unemployment in 20 years.

“Michigan’s labor market hit historic levels in 2023 and continued to improve in the first six months of 2024. The state’s unemployment rate was low for multiple demographic groups, while the number of jobs and labor force continued to expand,” said Scott Powell, chief data officer and director of the Michigan Center for Data and Analytics. “Looking forward, our recent projections indicate that any growth in the coming years will require more people moving into Michigan.”

While unemployment has continued to decline, Michigan has consistently shown higher unemployment than the nation as a whole, reporting 3.9% unemployment in 2023 compared to the national rate of 3.6%. Michigan also tied Arizona, Texas and West Virginia for the 10th highest unemployment rate in the nation.

Nevada ranked the highest of all states, with an unemployment rate of 5.1%.

Michigan’s jobless rate remained consistently higher than the national unemployment rate for the 20-year period from 2003 to 2023. | Michigan’s jobless rate remained consistently higher than the national unemployment rate for the 20-year period from 2003 to 2023.

Following fluctuations due to the COVID-19 pandemic, employment has recovered within the state, with 2023’s employment total surpassing levels from 2019. Additionally, the six-month annual average employment level for 2024 of 4,850,000 people marked the highest average employment total for Michigan since 2001’s annual average of 4,872,000 people.

When examining demographic data, the Center for Data and Analysis found that male joblessness hit a five year low in Michigan, closing the state’s gap with the national male jobless rate before seeing an uptick in 2024. While the female unemployment rate rose nationally, female joblessness saw a decrease in Michigan in the first half of this year.

While the unemployment rate for women was lower than men in 2019, 2020, 2021 and the first half of 2024, workforce participation was higher for men than women during this period.

Although data from the U.S. Bureau of Labor Statistics’ Current Population Survey found that Black or African-American residents saw higher rates of unemployment than white individuals from 2019 to 2024, the gap narrowed considerably in 2023 and has continued to close. In the first half of 2024, the jobless rate for Black residents was 5.5%, a 1.9 percentage point gap from the white jobless rate of 3.6%.

While workforce participation for white individuals exceeded levels of Black residents from 2019 to 2023, Black Michiganders saw a higher level of workforce participation in 2024.

In its 2023 Michigan Economic Analysis report the Michigan Center for Data and Analytics examined racial disparities in unemployment rates. | Michigan Center for Data and Analysis

The report found nonfarm payroll jobs had completely recovered in Michigan within three years of the COVID-19 recession, but it also noted a slow down in job growth in Michigan, and across the nation.

In examining the recovery of payroll jobs lost during the pandemic, the report notes it took nearly eight years for payroll jobs to recover to 2007 levels following the Great Recession.

Six of Michigan’s 11 major industry sectors reported growth in employment since June 2023, but growth in jobs has seen a slowdown, with Michigan reporting a 1.3% job growth rate in the first half of 2023 and .7% growth in the first half of 2024. However, job growth rates in the U.S. have been shrinking since 2021.

The report also examined the change in wages for Michigan workers, finding that while hourly wages have increased in recent years, those gains were undercut by inflation. Although average hourly earnings in Michigan’s private sector rose from $26.40 in June 2019 to $32.15 in June 2023, inflation has resulted in a .7% decrease in real earnings.

It also noted that Michigan is seeing a shift from low-wage jobs toward mid-range and high-paying jobs, with jobs paying $15 per hour or less have declining significantly over the past three years as occupations paying more than $40 per hour have grown by 3.9 percentage points overall in the last three years.

The median income for Michigan workers sat at $55,400 in 2022, slightly below the national median of $56, 900. When compared to the rest of the Great Lakes region, Michigan lagged Minnesota and Illinois —which boasted median incomes above the national level — but sat at a near tie with Wisconsin and Ohio as Indiana sat close behind with a median income of $52,800.

In examining data from the U.S. Census Bureau’s American Community Survey in 2021 and 2022, the report also found that racial and gender pay gaps are narrowing in Michigan.

While women previously made 77.8% of what men were earning in 2021, that number increased to 80.6% in 2022. However, Michigan women see a greater disparity than the national gender pay gap, with women earning 82.2% of what men earned in 2022. When ranking states with the smallest pay gap, Michigan was ranked 30th.

In recent years, Michigan’s leaders have placed an increased emphasis on growing the state’s population and retaining young talent within the state, however, projections included in the report note that Michigan’s population growth will likely hinge on increased migration to the state.

With deaths projected to increase and birth rates expected to decline over the next several decades, Michigan could see a sizable decrease in its population by 2050 unless the birth rate increases, or more individuals move to the state than away.

The Center for Data and Analysis notes this scenario could prove difficult as the net level of migration to Michigan has often been negative since the 1970s, but points to positive levels of migration in recent years.

If Michigan can maintain positive migration levels, the center projects Michigan’s population will total 9.9 million in 2050, with the U.S. Census listing Michigan’s population as 10.1 million in 2020. However, without migration, the center projects Michigan’s population will decrease to 9.3 million.

2023 Michigan Annual Economic Analysis Report

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