Michigan Future President Lou Glazer
File photo
Michigan's high-paid manufacturing workforce is contracting, but the relatively low salaries of its high-skill workforce could ultimately prove to be an asset, an Ann Arbor think tank reports.
Lou Glazer, president of Ann Arbor-based nonpartisan think tank Michigan Future Inc., said in a blog post that Michigan's low-paid, high-skill worforce could attract the "knowledge" jobs of the auto industry. His post analyzes recent reports that Toyota is considering relocating its Los Angeles-based auto operations to Ann Arbor or Kentucky.
"Conventional wisdom is that Michigan is not competitive for the global auto industry to locate here," Glazer wrote. "Think again! It's probably true when it comes to locating factories, but clearly it's not true in the knowledge part of the industry. It's a competitive advantage - both talent and cost - we have and should exploit."
A Michigan Future report last year asserted that Michigan's manufacturing economy would continue to contract. But, since high-skill Michigan workers have lower salaries than similar workers in high-tech regions such as Boston and Silicon Valley, the state's low salaries may ultimately become a magnet for investment.
This concept recently manifested itself when California startup Systems In Motion announced that it would hire 1,085 workers for a new information technology services operation in the Ann Arbor area. Among the reasons the firm located here was the low cost of high-tech workers.
According to Michigan Future, Michigan's average salary in "high-education attainment industries" in 2007 was about $53,000. The national average? About $59,000.
"If high labor costs here are a major reason to move manufacturing elsewhere, it may turn out that low labor costs are a big reason to move knowledge work here," Glazer wrote. "It, of course, is only an advantage if we have the talent a knowledge-based employer needs. Supply of talent clearly trumps cost."
Toyota, for its part, says it's not considering a major
restructuring of its operation. After reports that it was considering
moving jobs to Michigan or Kentucky, the Japanese automaker released this statement:
Toyota's North American affiliate companies have no plans to change their multi-company structure, nor plans for any significant geographic relocation of personnel outside of normal operations. Emphasis has been placed on finding new efficiencies, shared services and enhanced collaboration to address the changing economic conditions and prepare Toyota for the future automotive market environment.
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