LANSING – Keeping manufacturing jobs has been a top priority of state policymakers, but a new study suggests the state should put more emphasis into building knowledge-based industries specifically in technology – since the states with the highest concentration of knowledge workers have done far better than Michigan in income growth.

Over a 32-year period, the study said only two states did worse than Michigan in relative per capita income growth, and the 10 states that did the worst overall in income growth during that period had some of the lowest concentrations of higher-paying knowledge-based industries. The states that did best in terms of per capita income growth tended to have higher concentrations of workers of higher-paying, knowledge-based industries.

The study was authored by Lou Glazer, president of Michigan Future Incorporated, a think tank, and Donald Grimes, senior research the University of Michigan’s Institute of Labor and Industrial Relations, and looked at manufacturing and knowledge-based industries as engines of overall economic growth.

While the study stopped short of making specific policy proposals, it did raise the question of saving manufacturing jobs as a top economic priority.

“One thing that Michigan policy makers – in both political parties – seem to agree on is that saving manufacturing jobs is the state’s top economic priority,” the study says. But the data it reviews “suggests this may not be the best use of state resources. If the state is going to target industries to provide special supports, the evidence in this report suggests that manufacturing may not be the best choice.”

Liz Boyd, spokesperson to Gov. Jennifer Granholm, said the administration does not view manufacturing and high tech strategies as “either/or.”

While Granholm has called for both a national and state focus on preserving manufacturing jobs, she has also initiated a “Cool Cities” initiative to make urban areas more attractive, especially to younger, better educated workers. And a commission she appointed is now working on proposals to double the number of college graduates in the state.

“We know that cars are going to continue to be made, and they will be more technologically advanced, and we want to make sure those cars are made in Michigan,” Boyd said. At the same time, Granholm is pursuing development of high technology companies through her Technology Tri-Corridor initiative.

Manufacturing has historically been viewed “as an irreplaceable mass pathway to the middle class,” the study said. “Manufacturing is viewed as an important engine powering the economy. In industrial states like Michigan, many view it as the most important engine.”

With the state losing some 163,000 manufacturing jobs from 2000 to 2003, the authors said they wanted to see if manufacturing was correlated with stronger state economies, and if other types of companies helped move people into the middle class.

The largest number of workers in Michigan, more than 2 million in 2003, work in high-paying, high education jobs, the study said, which include financial activities, professional and technical services, education and health care. The next largest group, 1.3 million, work in low-paying, low-education jobs, that include retail services and recreation; while high-paying low-education jobs that included manufacturing and construction accounted for nearly 1.1 million workers in 2003.

Of the three sectors, the only to see a gain in jobs from 2000 to 2003, albeit a modest 3,500, was in the high-education sector. The other two sectors lost a total of 257,000 jobs.

Ironically, the study says, Michigan lost manufacturing jobs at a slower rate than the national rate. The number of manufacturing jobs fell by 12.4 percent in Michigan compared to 17.9 percent nationally.

The state was hurt by its lower concentration of service-sector jobs, especially in knowledge-based industries. Knowledge-based jobs grew nationally by 26 percent from 1990 to 2003, but only by 16 percent in Michigan.

During the 32-year period from 1969 to 2001, Michigan fell behind the national average in growth of per capita income. During that period, the growth in per capita income in Michigan was nearly 11.8 percent behind growth nationally, the study said. The national per capita income totaled $30,527 in 2001, while it stood at $29,499 in Michigan that year. Only Nevada and Hawaii saw slower growth in per capita income during that period.

In contrast, the District of Columbia saw per capita income growth at 31.2 percent faster than the national average. The district, with 2001 per capita income of $45,300, had a miniscule .53 percent of its workers in manufacturing while 31.5 percent were in knowledge-based jobs.

The district was followed by Massachusetts, where per capita income growth was 18 percent over the national average. The Bay State had 13.25 percent of its workers in manufacturing while 32.27 percent were in knowledge-based industries.

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