Thursday, September 17, 2009

Michigan Employment

When I was back in college they had on campus interviewing. At the time in the very late 80's we were in a midst of a recession and I was pretty open to talking to virtually any company.

I received a call from a recruiter and he started talking to me about an opportunity with Ryder trucking. Then he said something that I'll never forget

"It's in Detroit and don't hang up"

The words ran together very closely and with urgency so it is obvious that this was a common problem, even then - as soon as people even heard the word "Detroit" they simply hung up the phone as a non-starter. I didn't hang up on the guy (I was too polite back then) but I certainly viewed it as some sort of last ditch, about-to-be-homeless type of opportunity.

I have since worked near Detroit (in the vast suburbs) and I don't want to slam the place based on stereotypes. The suburbs are very nice and the whole area seems to function OK - you might go into the city proper for a sporting event (which has security) but that's about it.

This Wall Street Journal article reminded me of that time with the recruiter as it describes how white collar employees, often managers with years of experience in fields like marketing and technology, are finding themselves being laid off from the auto makers and related industries in Michigan. I'm sure that many, if not most, are hard working people just trying to do their best in a difficult situation. Since the housing market in Detroit has pretty much collapsed as well, people can't sell their houses (except at a huge loss), and it isn't obvious where they'd go, so they are just remaining in the state and are trying to make ends meet however they can. One former manager that they profile is now a janitor.

However, the part that the article doesn't touch on, is the fact that Michigan is an incredibly hostile place to do business and there aren't going to be "new" industries that are going to crop up to give these experienced employees new opportunities. Let's look at it from the potential entrepreneur's perspective - do you want to locate in a state with 1) high taxes 2) a very highly unionized, political work force 3) frankly not so great weather 4) a completely dysfunctional, if not ruined, major city in Detroit?

They are going to lose out on new business to states with better weather, a better tax balance, no or limited unions, and frankly a more pro-business culture. That isn't the Detroit area, that's for sure.

With no renewal possibility, and likely even more activist government and harsher taxes as their remaining asset base (autos) winds down, the future looks utterly bleak. Nothing new is coming in of any substance, and they can watch Texas (and Florida, Arizona and Nevada, once they get over the housing bust) boom and just wonder why.

Cross posted at Chicago Boyz


Dan from Madison said...

The State of Michigan runs ads on the cable TV networks up here trying to get businesses to locate there. I always laugh at them when they come on.

Gerry from Valpo said...

Michigan Employment = Jumbo Shrimp.