Wednesday, August 4, 2010

Michigan Factory Employment Down 450,000 Over the Last 10 Years

While Obama, Biden, and the Queen of Economic Disaster Jennifer Granholm attend ribbon cutting ceremonies for factories that will employ a few hundred, Michigan has lost manufacturing jobs by the hundreds of thousands. An interesting article at highlights how many of the new "advanced manufacturing" jobs are simply coming in a too slow a pace to dent the unemployment rate. Rick Haglund, the author of the story, writes:

While advanced manufacturing is important to Michigan's economy, it's not likely to produce more than about 10 percent of the state's total jobs.

This is tied to the challenge I've written about here of capex per job created rising faster than inflation. It wasn't in Michigan, but when Toyota built its Princeton, Indiana plant in 1998, it needed $350,000 in up front capital outlays per operating job created. But it's new Prius plant in Blue Springs, Mississippi will need $650,000 of capital investment per job created.

The solution is not some clever educational program or to attract "creative" workers. But rather to cultivate industries, like wind turbine production, where manufacturing is far more labor-intensive, and requires less than $200,000 in capex per operating job created.

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