A new study on the Michigan economy shows that while jobs are available, they do not pay enough to make ends meet, and the coronavirus pandemic is making it worse.
Michigan Future Founder Lou Glazer puts a good paying job at $20 an hour and he cites research claiming 60% of Michigan jobs pay less than that.
Glazer is concerned that the economy is morphing into one where wages do not catch up with costs.
“At the point where construction companies don’t have enough carpenters, you would think the wages for carpenters would go up,” he said.
Glazer worries the unintended two-tiered economy bodes badly for Michigan, where the college educated do just fine, those in the wage economy doing frontline work, like grocery stocking, restaurant serving, do not -- a problem only made worse by the pandemic.
“They’re more likely to lose their jobs and then if they lose the job, they’re less likely that job will come back anytime soon,” he said.
At the Detroit Economic Club, University of Michigan economist Gabriel Erlich believes people are going to see a two-tiered COVID recession and recovery.
“When you look at things like retail, especially leisure and hospitality, face-to-face interaction is a key inherent part of that business,” Erlich said. “And we’ve seen very disproportionate job losses and we do expect the recovery to be slower in those industries too.”
“For us, this is the economic challenge of our generation,” Glazer said.