Saturday, September 12, 2009

Flint's Dramatic Shift: Manufacturing to Service

The chart above (click to enlarge) shows the manufacturing share of total employment in Michigan's 12 major metro areas in both 1990 and 2009 (data available here), and also for the state of Michigan and the entire U.S. What's most interesting is that despite the decline in the manufacturing job share in all 12 metro areas, the relative ranking of the 12 Michigan metro areas stayed almost exactly the same between 1990 and 2009, except for Flint, which fell from #2 in 1990 (30.5%) to #12 in 2009 (only 5.3%).

Holland, Battle Creek, Benton Harbor, Muskegon, Grand Rapids and Kalamazoo were in exactly the same place and Jackson and Saginaw switched places. Ann Arbor, Detroit and Lansing each move up or down one or two places, but Flint was the only Michigan metro to move up or down more than 2 places, and actually moved down by 10 full places (#2 to #12). Flint (at 5.3% manufacturing share) is now remarkably less of a manufacturing town that its neighbor Ann Arbor at 6.5%. As much as everybody thinks of Flint as a blue-collar, manufacturing town, it's gradually become a service-based economy (see a related discussion here on the Flint Expatriates blog).

There must be something pretty unique about Flint compared to the rest of Michigan's metro areas, to explain such a dramatic change in manufacturing employment relative to the rest of the state. Here are a few ideas, please feel free to add more (Walt G?):

1. Flint was more heavily dependent on just one major employer (GM) than the rest of the state, and as GM has reduced its workforce over the last twenty years it has affected Flint more than other Michigan cities.

2. Flint's reputation as being a militant union stronghold may have led to more GM plant closings and job losses here than elsewhere in the state?


At 9/12/2009 5:50 PM, Anonymous Anonymous said...

Wow! I did not realize that Flint moved that far down the manufacturing list. That's a dramatic drop. Thanks for the information.

I think your reasons are, for the most part, correct. But our GM location was kept open and work consolidated in from other locations due to our innovative local contract. Sadly, our gain was Grand Rapid's, Pontiac's, and Mansfield's loss. We are having trouble fitting all the equipment into our floor space, and many jobs are working seven-days-a-week. From how we operated as the site of ground zero in the 1998 UAW/GM strike to now is amazing.

Militant unions will have no place in a 21st globalized economy where capital moves at lightning-speed. Decisions will have to be made using better financial acumen than we have used in the past. I believe our joint leadership is up to the task.

At 9/12/2009 7:10 PM, Anonymous Anonymous said...

Being an economist, do you every go beyond the numbers? US manufacturing dropped from 16% to 9% in 20 years. Is manufacturing more effecient or not affordable in the US? Is there a point where manufacturing drops too low and becomes a risk to a nation's economy? Or are these questions better left to philosophers.

At 9/12/2009 8:15 PM, Blogger Kelly D. Miller said...

It would be interesting to see the tax assessment camparisons between Flint and some of these other cities.

At 9/12/2009 10:22 PM, Blogger BxCapricorn said...

Walt, just wanted to let you know that I enjoy your comments. They help fill in details for many of these statistics. This site has better comments than any other I read.

At 9/13/2009 12:04 AM, Blogger JWilly said...

"Flint was more heavily dependent on just one major employer (...)"

I think you meant one industry, so as to take into account the destruction of so many of the local second and third tier specialized suppliers that could not find new customers.

At 9/13/2009 12:30 AM, Anonymous Anonymous said...

Jwillie is right Flint looked a good bit like Calumet MI in the copper country. Recall that in 1900 the city had so much money it did not know what to do so it built an opera house. After WWII the copper mines ran out/became uneconomic and the city declined till today it has 1/10 the population it had in 1900. Butte MT has had a smaller decline due to the mining bust there. For a time it was thought that only natural resource based towns were subject to this, but now we see that any city can fall victim if its economy is largely one sector.
Houston TX and Pittsburg had this happen earlier and have come back by diversifying their economies.
The question is will Eastern MI be able to do the same. (West MI always has had a more diversified economy)


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