GRAND RAPIDS – The West Michigan economy, still heavily dependent upon manufacturing, will probably not grow as strongly in 2016 and 2017 as it did this year, but the trajectory definitely is up and to the right, an economist predicted Thursday.
George Erickcek, a senior regional analyst for the Upjohn Institute for Employment Research, also said the Grand Rapids metropolitan area’s demographics have changed to reflect the younger people flocking to downtown. Grand Rapids, while still a factory town with a highly productive, but low-skilled workforce, now has a higher proportion of highly educated young professionals from 25 to 34 than other comparable mid-sized cities except Portland, he said.
He made his predictions during the annual Right Place Economic Outlook breakfast at the J.W. Marriott downtown.
Still, Erickcek said there’s a missing piece to the recovery. While unemployment has fallen to 3.3 percent in West Michigan, wages in the region have remained flat.
Economists usually expect wages to rise when there’s a labor shortage. Erickcek said he’s seen little evidence of rising wages in West Michigan, or across the United States, where unemployment has fallen into the 5 percent range.
It remains to be seen if pay raises are yet to come as the recovery matures, he said, adding that there are some signs of wage growth in Ottawa County, which has had the region’s lowest unemployment rate for the past year.
Erickcek said the local economy grew in the past year “for all the right reasons.” New jobs were added and the labor force grew while the number of persons seeking work fell, he said.
Since the start of the Great Recession in late 2007, Grand Rapids’ economy has grown by 9 percent while the rest of the nation has grown by just 4 percent, Erickcek said.
West Michigan’s eight core industries also have out-performed their peers over the past 10 years, producing nearly 24,000 more new jobs because of the region’s competitive edge, he said.
