U.P. Employment down; will the trend continue?

Michigan State Roundup

Published July 1, 1991  | July 1991 issue

With the March unemployment figure at 13.1 percent (up from 10.7 percent a year ago) and the state wrestling with a budget deficit that demands cutbacks in every sector, the Upper Peninsula (U.P.) may be facing some hard times.

Part of what's causing the downturn in jobs is the end of a building boom, specifically in the state-supported sector, and no new state-supported construction projects are in the offing.

To the contrary, the state is in the process of closing down some U.P. facilities and cutting back personnel levels at others. For example, if the state mental hospital at Newberry closes as planned, 300 employees will be out of work. And while a new state prison in Baraga will soon hire workers, people who were trimmed from other prison staffs will have first crack at those jobs. That's especially bad news for Baraga County, which had an unemployment rate of 15.4 percent at the end of March.

"The significance is that government jobs are no longer the leading source of employment growth in the U.P.," says Richard Anderson, director of the Northern Economic Initiatives Center (NEIC), Northern Michigan University, Marquette. Anderson says there's good and bad news here. The bad part is that the U.P. became dependent on government jobs; the good news is that where the economy is more diversified it is performing well.

That U.P. mines are cutting back is reflective of the auto industry decline, which, Anderson says, is only moderate now. "We tend to focus on the major industry layoffs," Anderson says, "but they're not as significant now as in the past. The deep swings are not so deep anymore."

With a growing focus on small business development, the U.P. is also moving away from reliance on mining and other extractive industries. According to a NEIC study, entrepreneurship has created most new jobs in the U.P. in the recent past.

In 1988, more than 15,000 people, or 15 percent of the U.P.'s workforce, were employed in almost 3,000 new business enterprises created since 1982. In fact, without those new businesses, employment in the U.P. would have declined.

Some sectors are doing well though, Anderson says. Furniture and wood products manufacturers are seeing orders at their peak. And there is a moderate pickup in overall manufacturing.

Kathy Salow, labor market analyst at the Michigan Employment Security Commission, concurs with Anderson, and adds that the picture may be brighter because tourism, construction, mining and transportation industries generally pick up in spring and summer.

Kathy Cobb