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Posted on Tue, Dec 1, 2009 : 3:45 p.m.

Michigan's population declines pummel economy, housing market

By Nathan Bomey

A drastic contraction in Michigan’s population is a recipe for further economic erosion, a Michigan State University researcher said today.

Michigan lost 89,844 residents from 2005 to 2008, according to a new MSU report released today. But Washtenaw County fared better, gaining 3,000 residents during the same timeframe.

MSU Land Policy Institute Director Soji Adelaja said the decline was largely attributable to people who moved to other states seeking job opportunities and better quality of life.

Washtenaw County's gain is a reflection of its vibrancy and the economic power of the University of Michigan, Adelaja said. The report found that 63 of 83 Michigan counties lost population from 2005 to 2008.Washtenaw also gained about 19,000 residents from 2000 to 2005.

“It’s no accident that Washtenaw County was one of the few places in Michigan that gained population,” Adelaja said in an interview.

Still, the state’s economic collapse is leading thousands of residents to leave in search of more fertile economic ground. Michigan's unemployment rate in October was 15.1 percent. The national rate was 10.2 percent.

Michigan and Rhode Island were the only states whose populations declined from 2006 to 2008, according to the report.

The U.S. Census Bureau estimates that Michigan's population in 2008 was about 10 million, up 0.7 percent from 2000. However, the U.S. population has increased 8.0 percent since 2000.

Michigan's recent population decline is particularly concerning because the increasingly service-oriented economy needs talent and spending to succeed, Adelaja suggested.

“When people move, they take economic activity with them,” he said. “More and more of the things we spend our money on - those services - tend to move with people."

The impact of Michigan’s population exodus on the housing market is significant. The 63 counties that lost population between 2005 and 2008 collectively lost about $2.49 billion in home equity, according to the report. Wayne County alone lost $1.8 billion.

Michigan’s 83 counties collectively lost $2.42 billion in home equity from 2005 to 2008.

“These property-value losses associated with population loss alone are quite substantial,” the report said. “These losses add another layer of constraint on the financial health of property owners and on future prospects for economic growth.”

Some distressed homeowners are leaving the state for greener pastures, while others who want to move are staying because they can’t afford to leave. Michigan’s average home value is nearly $100,000 below the national average.

But Adelaja said that the housing market is playing only a small role in the shifting complexion of Michigan’s population. Workers are leaving for other economic reasons and quality of life, he said.

“Michigan just really needs to be able to address the issue of how welcoming it is to innovation, how well it attracts young people and knowledge workers and what infrastructure you have in place to attract population,” he said.

Adelaja said he was most concerned about what would happen to Michigan’s population after the national economy gains steam. A University of Michigan forecast released Nov. 20 predicted that the state’s unemployment rate would stay above 15 percent through 2011.

“Michigan is going to be in this slump for a while longer,” he said. “As economic opportunity starts to emerge in other places, what is that going to do to our population?”

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter.


Do not taunt Happy Fun Ball

Mon, Jan 25, 2010 : 7:52 a.m.

Unions have done so much good for the Workers of Michigan that I think MORE Unions would help improve the State even more.. Did you know that RIGHT TO WORK States allow for 'multiple UNIONS' to organize within one company! Or that Right to Work States have job growth rates that lead the Country.. Or that Right to Work States have far lower overall costs and lower taxes, on average, than non-Right To Work.. National Companies are AVOIDING MICHIGAN because other States, like RIGHT TO WORK STATES, lower the cost to do business and therefore can HIRE MORE PEOPLE. If you want Jobs in Michigan - bring in the people who HIRE.


Wed, Dec 2, 2009 : 3:46 p.m.

I would like to know by what methodology Ann Arbor and Washtenaw county actually "gained" population, other than more homeless folks. The University doesn't hire half the number of people it did 3 or 4 years ago in any category other than medically related, and even there the competition is so keen you practically have to have an inside connection to get an interview, yet alone a job. Same for other UM positions, too. All the dot-com job-sites are posting a lot fewer jobs in this area than even a year ago. Without more jobs, this area's problems are just beginning, and any upticks will be lackluster, at best. I just don't see where these jobs will come from, and I would be willing to bet that the real population decline is much greater than this article indicates.


Wed, Dec 2, 2009 : 8:43 a.m.

Grandholm was right. 5 years later Michigan's population and economy has blown away.


Wed, Dec 2, 2009 : 2:15 a.m.

I really don't blame anyone for leaving this state in search of greener pastures. A friend of mine recently graduated with a bachelors degree in engineering and was immediately offered a job in Houston with a starting salary of $70k. He has told me housing is much cheaper, as well as no state income tax. Unless there is serious governmental reform in Michigan, we will continue to lose valuable human capital to fiscally sound states who lack bloated welfare systems. I really hope the next Governor of this state is not of the "bleeding heart" variety.......

David Briegel

Tue, Dec 1, 2009 : 9:28 p.m.

So we no longer have a currency problem with China? Surely you jest.


Tue, Dec 1, 2009 : 7:22 p.m.

Couldn't agree more llspire! Several years ago Illinois was passing gun bans and gun taxes that drove several gun makers from the state (including some big names!) Several other states welcomed these firms with open arms. What was our governor's response? She flew to Germany to try to keep a Daimler presense here in Michigan (which, of course, failed.) I mean, it's not like we have a bunch of metal workers sitting around looking for jobs or anything... nah, why try to lure American businesses making a Constitutionally-protected product to the state when we can go to Germany in a (clearly) futile attempt to remain dependent on one dying industry?


Tue, Dec 1, 2009 : 6:49 p.m.

I thought Granholm was going to tax us out of this problem


Tue, Dec 1, 2009 : 6:22 p.m.

This article puts the 'cart before the horse' as Grandma would say. Population loss isnt what devastated the housing market or the economy - job loss did! Cities such as A2 that garner a larger share of their wages from taxpayer-funded sources have lost fewer jobs as the tax dollars are still flowing in. Private salary-based incomes are a much small percentage of the total incomes in the area, hence lower unemployment, etc. Please tell me no one here seriously believes Michigan's economy has gone down the tubes because people moved away in search of an income. Michigan wont come back - CANT come back - until it has jobs to offer ALL of its citizens. Without a quick turn-around, the tax base this town depends on for its well-being is going to disappear. We are perilously close to that point now. One thing that is perpetuating this fiasco is the insistence on 'green' jobs as opposed to ANY jobs.People dont leave the state because of 'distressed housing': housing is 'distressed' because someone can no longer afford the mortgage. Again, it's jobs - all jobs!


Tue, Dec 1, 2009 : 5:55 p.m.

These types of statistics are discouraging. All of this is the direct result of the failure of the state policy makers over the years to encourage a more diverse economy - one that is not dependent on one industry. We're all paying the price now in lower housing values, decreased public services, limited job prospects, crappier roads, etc, etc, etc. Maybe now, finally, the politicians in Lansing will stop their incessant bickering among themselves and start working together to aggressively attract new businesses to this state.


Tue, Dec 1, 2009 : 5:04 p.m.

It turns out when you yell at people and pound the table, they don't respond very well, particularly when you owe them money. James Fallows of the Atlantic Monthly has been collecting examples of positive developments (on Iran, North Korea, missiles) with China since the "failed" trip. Here's one on the currency issue: I suspect this will, in time, be seen as one of the most successful trips to China by a U.S. President.