Michigan’s economy was in the national spotlight last week.
So exactly how good is Michigan’s economy? And who is benefiting?
“I think it’s inevitable that a recession will come sooner or later.” - Charles Ballard, MSU economics professor
As part of the weekly series MichMash, MLive’s Cheyna Roth and WDET’s Jake Neher speak with Michigan State University economics professor Charley Ballard about what people think they know — and what they should know — about Michigan’s economy.
Click on the player above to hear MichMash’s full conversation on the state of the economy.
Michigan, overall, is doing “way better” than 2009, which Ballard called a “disastrous year.”
But the economy has slowed down, and over the last three years job growth and gross domestic product growth has been especially slow.
Ballard said that while people might be feeling good about an economy that’s doing better than it was about a decade ago, there are areas for concern, especially with the potential of a recession on the horizon.
“We in Michigan have grown less rapidly than the U.S. average for the last three years and for most years in the last decade.”
Ballard said, nationally, things have improved over the last few months, so people stopped talking about the possibility of a recession.
“Although I think it’s inevitable that a recession will come sooner or later,” Ballard said. “But Michigan’s economy has been sort of what I consider, not in a recession, but kind of on the edge of a recession.”
In the past year there’s been almost no job growth, Ballard said. At some points, Michigan had negative growth with fewer jobs than in January of 2019.
It’s a similar situation with the state’s gross domestic product (GDP); the dollar value of all goods and services produced in the state.
“We in Michigan have grown less rapidly than the U.S. average for the last three years and for most years in the last decade,” Ballard said.
As a potential recession looms, and given the nature of the economy ebbing and flowing, Ballard said one of the best things Michigan residents can do is “have a cushion.”
“If you have some savings, that will help you to weather hard times if and when hard times come,” he said. “Of course, most Americans have very little savings. About half of American households are living from paycheck to paycheck.”
Even if a person can’t save a lot, just having a small cushion can make a difference, Ballard said.
“The miracle of compound interest is that one dollar when you’re 20 is likely to be worth a whole lot more when you retire.”