Perhaps Gov. Gretchen Whitmer thought she could flip the economy back on as easily as she shut it down, but recent reports highlight that is not the case. It will take a long time for Michigan to fully recover from some of the nation’s strictest lockdown measures.
Many small businesses (and the jobs that come with them) are simply not coming back, especially those in the hospitality sector. Thousands of restaurants shuttered permanently in response to COVID restrictions. Take a stroll through most any Michigan city and once-vibrant downtowns are now littered with empty storefronts.
Michigan’s comeback is one of the most sluggish in the country, according to data from the Bureau of Labor Statistics.
One review of the federal data from MLive shows that Michigan ranks 43rd worst in the country for its job recovery, with just 92.8% of the jobs it had in February 2020. And Michigan ranks last in the Midwest.
This echoes a June analysis from the Anderson Economic Group, which notes the Michigan labor market has struggled to recover and has a “long way to go.” It found that as of May, the state had 217,000 fewer workers and job seekers than it did in February 2020.
The labor force in Michigan has shrunk by 4.4%, which is much higher than the U.S. average of 2.1%. Nearby states such as Wisconsin and Indiana have either nearly or fully recovered their pre-COID labor forces.
“While other states have been recovering lost jobs and job seekers, the Michigan labor market has been stagnant,” said Brian Peterson, AEG’s director of public policy and economic analysis, in a statement.
Businesses that have survived are now dealing with other glaring problems, including a shortage of workers. The reason? Many of them can make more on unemployment.
Even though at least half the states have chosen to end the $300 weekly federal jobless benefits early, Michigan has not. Republican lawmakers tried to do this last month, but Whitmer slapped them down with a veto.
Her veto is further hampering the state’s recovery. In contract, the states recovering the fastest have all ended the federal unemployment boost to encourage people to get back to work.
Once again, it’s restaurants and hotels that are suffering the most.
A survey last week from the Michigan Restaurant & Lodging Association highlights these difficulties, more than a month after the end of Whitmer’s COVID mandates. The report found staffing shortages throughout the industry, including:
►About 90% of restaurants and nearly all hotels are operating with inadequate staffing to meet demand.
►More than 85% of full-service restaurants reported closing early or for specific segments during the day as a direct result of inadequate staffing levels.
While Michigan has made progress in recent months, the economy here has more ground to make up than most other states. This reality, along with other policies that keep harming the recovery, must inform all future decisions related to the pandemic and shutdowns.