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For The Week Of April 14, 2017 Through April 20, 2017

How Two Opposite Things Can Exist

By John Lindstrom
Publisher
Posted: April, 20 2017 12:39 PM

Unemployment is down. By any measure Michigan’s economy is improved since 20089, whether because of the national economy or because of specific state policies or a combination of the two. One doesn’t need a statistician to see hiring signs on display at businesses across the state.

Yet, child poverty is up in Michigan. And up significantly since 2008. According to the latest Kids Count study, more than 22 percent of the 2.2 million children under the age of 17 living in the state in 2015 were poor. In 2008, it was 19.3 percent, bad enough but still better than 2015.

How does such a contradiction occur? The two facts are completely counter to one another. If unemployment goes up, then one expects child poverty to increase. Ergo, one would say, if child poverty has increased, so too must have unemployment.

But unemployment is down, down to 5.1 percent seasonally adjusted in March, according to figures released by the Department of Technology, Management and Budget. The state still has not regained all the jobs it had in 2000, but since 2010 employment has increased by hundreds of thousands. In March, 4.666 million people were working in Michigan.

Yet, since 2008, child poverty is up.

Part of the explanation may lie with the timeframes used. In 2008, Michigan was still struggling through its one-state recession but had not yet gone into the full horror of the Great Recession. The average labor force size in Michigan during 2008 was 4.92 million and the average number of people working was 4.52 million people, according to the Senate Fiscal Agency.

In 2015, the end year measured in the Kids Count study, the average labor force was 4.75 million and the average number of people working was 4.49 million. In one sense, the economy in 2008 was still a little stronger than the economy in 2015. Except in 2015, the state’s unemployment rate average 5.4 percent and in 2008 it averaged 8 percent.

Two years later, just last month, the total workforce was more than 4.9 million – close to 2008’s average – and the number of people working exceeds the average number of those working in 2008. Perhaps then the 2017 Kids Count book will show some improvement in child poverty.

This, however, is not a story of playing with numbers to get the results one wants. It is part of the task of seeing how two apparently contradictory conclusions can still be correct. It does not delve into how one solves the contradictions.

Since 2008 the nature of jobs has changed. The state has seen improvements in jobs needing more skills, a higher level of education and training. Lower skill jobs have lagged in growth. And lower skill jobs pay less.

What has also lagged, and any economist of any ideological stripe will concur, is incomes since 2008. A Michigan worker was once of the highest-paid workers in the U.S. No longer. Per capita income in Michigan in 2015 was $42,427 while nationally it was $47,669.

The $5,000 difference would go a long way towards paying off the annual average cost of child care per child, according to the Kids Count book (the average annual cost is more than $6,700). And with more than 66 percent of children under the age of 5 living in households where all the parents have to work, child care is a requirement for these kids.

Someone working full-time, earning Michigan’s new minimum wage rate of $8.90 an hour earns $18,512 a year. What does deducting $6,700 in childcare do that annual income? Is that the most efficient use of those funds, adding to further economic growth?

The economy is better. Child poverty is up. These are facts. They are not mutually exclusive nor do they cancel each other out. They are not pleasant co-existing realities, but they are realities. The trick is not really in proving they can exist simultaneously.

No, the real trick in the end – keeping the economy growing and lowering child poverty -- will be much harder to pull off.

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Georgia Race Portends Little For Michigan In 2018

By Zachary Gorchow
Editor
Posted: April, 18 2017 12:56 PM

All political eyes today are on the 6th U.S. House District in Georgia, a suburban Atlanta seat where everyone who runs for office, is in the business of politics or studies and writes about politics will try to glean some greater national meaning from the special election taking place there.

The seat is a longtime Republican bastion, but because President Donald Trump ran more than 20 percentage points behind 2012 Republican presidential nominee Mitt Romney and it has the type of highly educated, high-income population slowly trending toward Democrats, Democrats still fuming about Mr. Trump’s 2016 victory and the first three months of his presidency see a chance to make a statement.

If the Democratic candidate were to win the seat, it would surely and rightfully produce euphoria among Democrats about their chances of putting the U.S. House in play in 2018 if they can flip similar seats. A Republican victory would reaffirm that while rural, blue collar, mostly white areas have moved sharply to the Republicans, Democratic hopes about an incursion into once Republican high-income, high-education areas are still a ways off.

Reading much into these results as far as what it would mean for Michigan in 2018 looks like a big stretch, however.

The Atlantic published an interesting piece today looking at several dozen U.S. House seats similar in profile to Georgia’s 6th District based on how much worse Mr. Trump did than Mr. Romney in the seat as well as the percentage of college-educated white.

Georgia’s 6th District is at the uppermost end of that scale.

There’s one Michigan district that meets the criteria, the 11th District held by U.S. Rep. David Trott (R-Birmingham), not surprising given the high-income, high-education demographics of the district that covers well-to-do areas of Oakland and western Wayne counties, but it is on the lower end of the scale.

And a deeper look at the demographics of the two seats show they have less in common than at first glance beyond both being groupings of traditionally Republican, high-income, high-education suburbs in a major metropolitan area.

Georgia’s 6th District, with a white population of 69.8 percent, is far more diverse than Michigan’s 11th, with a white population of 80 percent. And the percentage of those born outside the United States, a bad demographic for Mr. Trump with his policies curbing immigration, is 21.3 percent in Georgia’s 6th compared to 13.6 percent in Michigan’s 11th.

While Michigan’s 11th has a relatively high number of residents with bachelor’s degrees at 46 percent compared to other Michigan congressional districts, Georgia’s 6th is at a sky-high 69.8 percent.

And maybe most of all, Michigan’s 11th simply did not seem to recoil from Mr. Trump in the way Georgia’s 6th did. While Mr. Trump’s margin over Hillary Clinton in 2016 fell by 21.8 percentage points in Georgia’s 6th compared to Mr. Romney’s margin over President Barack Obama in 2012, it only dropped by 1 percentage point in Michigan’s 11th, based on data compiled by Daily Kos.

National Democrats have put Mr. Trott on their radar given that Mr. Trump ran below 50 percent in the district even as he topped Ms. Clinton there. Electing a Democrat in Michigan’s 11th will be a steep hill to climb. There is no obvious all-star Democratic candidate given the way Republicans drew the district, and Mr. Trott’s enormous personal wealth means any Democratic candidate will need tremendous resources to compete.

The 2018 elections are too far away to know yet exactly what that race will look like. But while today’s special election in Georgia (and a subsequent runoff there, if it happens) could provide some signals on how the overall 2018 national political dynamic is shaping up, it’s value as a parallel for anything in Michigan looks low.

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