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Job Losses in Wayne County Will Be Moderate through 2008

4/11/2006 --

Detroit area will lose more than 11,000 jobs in the next three years—a far cry from the 76,000 jobs lost over the past five years.

ANN ARBOR, Mich.—Despite the heavy downturn in the domestic auto industry, Wayne County will lose jobs at a moderate pace over the next three years, say University of Michigan economists.

The county is expected to lose 3,900 jobs this year (the same as last year), 4,000 jobs next year and 3,400 jobs in 2008. The projected losses, however, are a substantial improvement over the past five years, in which the county lost 76,000 jobs, they say.

"As with many local economies in Michigan, Wayne County has continued to lose jobs since 2000," said George Fulton, an economist at the U-M Institute of Labor and Industrial Relations, part of the University's Ross School of Business and School of Social Work. "As the restructuring of the domestic auto industry runs its course in 2009 and later, the economy will eventually return to job growth, labor force growth permitting."

In their annual forecast of the Wayne County economy, Fulton and fellow economist Donald Grimes say that motor vehicle and parts manufacturing will account for three-quarters of the net job loss in Wayne County in 2006-2008—reflecting structural problems faced by the domestic auto industry.

All told, the U-M economists predict that Wayne County will lose 5,900 jobs in auto parts manufacturing and 2,600 jobs in motor vehicle assembly over the next three years. In addition, construction will lose another 1,500 jobs.

However, the private service-providing sector will add about 4,000 new jobs over the next three years, mostly in professional and business services, private education and health services, and leisure and hospitality, they say.

Fulton and Grimes say that despite the overall projected job losses through 2008, Wayne County has assets that could help diversify its economy into areas with longer-term growth potential.

"The knowledge-based economy is the most promising avenue for future economic prosperity," Fulton said. "Knowledge-based industries require a skilled and educated work force, which is highly correlated with economic success in general. Wayne County must become more successful in educating, training, attracting and retaining highly skilled workers in order to flourish in our transitioning economy."

Tourism, say Fulton and Grimes, is another potential economic engine for county prosperity, but this requires an accelerated effort to enhance and market the assets of the region.

"In this regard, downtown Detroit, including its cultural, entertainment and recreational amenities, is an asset that currently falls well short of its potential," Grimes said.

In addition to expanding its knowledge-based industries and tourism, Wayne County should make greater investments in creating efficient transportation networks and modern infrastructure. Detroit Metro and Willow Run airports, for example, are gateways for export-based regional economic development, the economists say.

"Investment in the development of the Aerotropolis—a 25,000-acre parcel of land located between the two airports—is a forward-looking strategy in the evolving global economy," Fulton said.

In all, Fulton and Grimes say that continued economic development in Wayne County will require taking a long-term view of problems, working together for the common good and paying attention to the region's image.

"Perception can shape reality," Grimes said. "If Wayne County is perceived as a good place to work and play, it becomes a stronger magnet to attract investors, entrepreneurs and visitors."

For more information, contact:
Bernie DeGroat
Phone: (734) 936-1015 or 647-1847