STATE ECONOMY IN REVERSE
Sarah Kellogg, Washington Bureau
WASHINGTON—Michigan’s economic momentum is the worst among the 50 states, lacking the vitality of even other Rust Belt states and those in the Deep South, according to an analysis of state economic trends.
The latest report by Federal Funds Information for States, a research group financed by the National Governor’s Association and the National Conference of State Legislatures, shows that Michigan’s economic momentum in the fouth quarter of 2006 was moving in reverse.
“Michigan is clearly in the worst shape of all the states,” Marcia Howard, the analyst and author of the report, said Tuesday. “Michigan’s population isn’t growing that much and on top of that you have the whole contraction of the manufacturing sector.”
The Index of State Economic Momentum ranks states based on their most recent performance on three key measures—growth in personal income, employment, and population. The components are averaged, and the national average is set at zero. State scores are expressed as a percentage above or below the national average. Michigan’s score was -1.97.
State officials acknowledged that the last-place score reflects Michigan’s current economic predicament.
“We would never deny that Michigan’s economy is challenged because of globalization,” said Liz Boyd, a spokeswoman for Governor Jennifer Granholm. “Our state’s economy has been built for over 100 years on a manufacturing platform. It is going to take some time to transform that economy.”
Boyd said she had reservations about the index’s findings in the fourth quarter of 2006 because they were slanted due to changes in Louisiana. States are graded on a curve and Louisiana’s robust employment and population growth a year after Hurricane Katrina resulted in poor scores for other states.
Howard concluded that Louisiana’s hurricane recoverey efforts impacted the scoring curve, but she said it still didn’t change the fact that Michigan along wqith a ahndful of other states in the Midwest and New England are struggling.
“Every state around Michigan isn’t doing that well, either,” said Howard, noting that Ohio ranked 48th, Indiana 45th, and Wisconsin 43rd.
Nineteen of the 50 states had negative economic momentum.