At Southwest Michigan First’s recent State of Economic Development event, Upjohn Institute President Mike Horrigan provided a data-driven look at key economic trends in Southwest Michigan. He also highlighted challenges and opportunities that will shape the region’s workforce in the years ahead.
Economic Outlook
Horrigan noted that the economy in Michigan’s Prosperity Region 8 remains strong, with continued post-pandemic recovery. The region, which includes Berrien, Branch, Calhoun, Cass, Kalamazoo, St. Joseph, and Van Buren counties, has shown positive developments:
- Employment-to-population ratios have returned to pre-pandemic levels across all seven counties, as have labor force participation rates.
- The recovery is particularly notable, given that both Michigan and Region 8 experienced steeper payroll declines during the pandemic and took longer to rebound.
- Industries with the largest employment gains include retail trade, manufacturing, and construction, while finance, insurance, and real estate have seen the biggest job losses.
Despite these positive trends, challenges remain:
- Wage growth has not kept pace with rising housing costs, straining family budgets.
- Child care availability is a significant barrier to workforce participation, with the region having capacity for only 56% of children aged 0-5, and rural areas facing an even larger gap.
Demographic Outlook
The region’s long-term economic health is closely tied to population trends, which have been mostly negative. Between 2013 and 2023 in Prosperity Region 8:
- Only Kalamazoo and Branch counties experienced population growth.
- Kalamazoo was the only county to see an increase in the prime working-age population (ages 25-54).
Horrigan also pointed to a broader trend: slowing population and employment growth in developed countries, in stark contrast to strong growth in developing nations. This shift will have implications for workforce availability and economic vitality in the U.S.
Career and Workforce Outlook
Horrigan reinforced the well-documented fact that education pays:
- Workers with a bachelor’s degree or higher earn an average of $1,574 per week.
- Those without a high school diploma earn an average of $694 per week.
However, he also emphasized that alternative pathways to higher earnings exist:
- Overall, high school graduates earn about $860 per week.
- Without a certificate or licensure, high school grads earn about $838 per week.
- Adding a license or certification raises weekly earnings to $1,000.
As the labor market evolves, demand for higher-skilled workers will continue to rise, while the earnings gap between those with and without post-secondary education will widen. One major factor driving this shift is the increasing use of artificial intelligence (AI):
- Jobs requiring a bachelor's degree or higher are expected to grow, despite the increasing use of AI technologies to substitute or complement work activities.
- Jobs that typically require only a high school diploma or less are likely to decline.
Looking Ahead
Horrigan’s insights make it clear: Southwest Michigan’s economy is recovering, but challenges remain. Addressing wage growth, childcare access, and workforce training will be critical to sustaining economic momentum and ensuring long-term prosperity in the region.
Southwest Michigan First is an economic development agency that works to promote and grow the economy of Southwest Michigan.