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Tuesday, June 21, 2011

Metro Detroit region will experience a lost decade in job creation, report cites

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U.S. Conference of Mayors report
cite that it will take the Metro Detroit
region until 2021, before employment
rates are at pre-recession 2005 levels.
The saying “the lost decade” is not just a statement for unemployed job seekers of the Metro Detroit region; instead, it is a reality. 

A report released on Monday, June 20th from the U.S. Conference of Mayors, cited the Detroit region, as one of the 46 metropolitan areas nationwide facing up to a lost decade period when it comes to job creation.


For robust job creation to return to the Metro Detroit region, the report cites it will take until beyond 2021, before the area regains up to 323,400 jobs lost since the beginning of 2005. 

The year is notable because this is when the regional pre-recession employment hit its’ peak, according to a report by HIS Global Insight economists.

Michigan unemployment rate rose statewide to 10.3% for May 2011 and for Metro Detroit to 11.1%. The Conference of Mayors reports predicts both Metro Detroit and Miami-Ft. Lauderdale regions will end this year with an 11.3% joblessness rate. At the end 2010, unemployment rates for the Detroit region were 12.4%.

According to Jim Diffley, IHS senior director and chief regional economist, the metro Detroit region can expect a tight employment market and high unemployment rates for years to come.
"Unemployment rates are going to stay high," cited Diffley to the Detroit Free Press.
Metro Detroit region slow pace of hiring factors are impacted by declining population and heavy reliance on manufacturing, Diffley noted. Both factors will lag the area return to full employment over other regional economies.

The report urges Congress to tackle the jobs crisis, forecasting that the national unemployment rate, which was 9.1% in May, will not fall below 8% until late 2013. 

Though the economy needs a credible, long-term deficit reduction plan, "it does not need an immediate dose of austerity," the report from the U.S. Conference of Mayor states.

A U.S. House Republican plan by Representative David Camp (R-MI), to focus on spurring opportunities for businesses to hire with tax incentives, was yanked from the schedule on June 3rd, members of the GOP said they "didn't want to vote for a bill they didn't understand". It is unknown if the measure will be re-drafted before ending the 2011 Congressional session.

Despite the gloomy job creation news, for Michigan as a whole, the economic statistics were not all grim. Among the country's 100 largest metro areas, Detroit had the biggest year-over-year decline in first-quarter unemployment rates, with a drop of 3.5 percentage points. Also, the Metro Detroit economy grew by 2.4%

The report found that Detroit had the 14th-largest metro economy in the country, ranking just behind Minneapolis, MN but, ahead of Phoenix, AZ.


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