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Posted on Fri, Mar 30, 2012 : 5:59 a.m.

Ann Arbor area in 2014: Labor shortages possible

By Lizzy Alfs


University of Michigan economists George Fulton (seen here at Thursday's Washtenaw Economic Outlook Luncheon) and Don Grimes project that the Ann Arbor area could be facing labor shortages by 2014.

Angela J. Cesere |

(Exclusive economic forecast: Ann Arbor area to add 11,000 jobs over 3-year stretch)

Related story: Washtenaw County economy in robust recovery: But are they good jobs?

Washtenaw County’s labor pool has been shrinking since 2007 as more discouraged workers stopped looking for work — and if those workers don’t reenter the workforce in the next few years, the Ann Arbor area could face a potential labor shortage, according to a new economic forecast conducted by the University of Michigan for


Nurses — like Emma Matz at the University of Michigan Health System's C.S. Mott Children's Hospital — will continue to be in high demand over the next several years.

Photo courtesy of University of Michigan Health System

A labor shortage, particularly of qualified workers, is described as a "looming problem" in the U-M economists' report. The county is expected to add more than 11,000 jobs over the next three years.

The county’s unemployment rate fell from 8.1 percent to 6.6 percent between 2010 and 2011 -- attributed to both job gains and a shrinking labor force.

To be considered in unemployment statistics, a person has to be “actively” searching for a job, said economist George Fulton, who conducted the study with economist Donald Grimes.

“Thus, our unemployment rate has been improving not only because we are adding jobs, but also because people have stopped looking for work,” the forecast says.

The forecast predicts the local labor force will begin growing in 2013 at a “fairly healthy rate” of 1.5 percent in 2013 and 1.9 percent in 2014.

Click here to download Washtenaw County economic forecast 2012-14 (PDF)

At the same time, the unemployment rate is predicted to slowly fall, dropping to 5.5 percent in 2012, 5.2 percent in 2013 and 4.7 percent in 2014.

But those labor force predictions could be too optimistic, the forecast says.

“One of the things we’re seeing within the last year at the national level and state level, and to some extent the local level, is that even though the economy has improved, people haven’t come back [into the workforce],” Grimes said.

He said this could be because people have “found a way to live” without being a part of the labor force, such as retiring early, receiving disability checks or scaling back family income.

He added: “Maybe these people don’t come back into the labor force in 2013 and 2014, and that’s where we face this big dilemma.”

And one of the main problems with a limited labor force, the forecast identifies, is a lack of qualified workers.

“I think one concern is to have access to the workers with the skills that the employers are looking for, and there’s a definite risk of that,” Fulton said. “We could be encountering shortages in that area, which is a problem.”

The problem is one that has come into the spotlight lately, with Gov. Rick Snyder recently issuing a “special message” on enhancing Michigan’s workforce development and talent initiatives. Snyder said Michigan has more than 77,000 job openings that aren’t being filled because of a lack of talent.

Ann Arbor SPARK CEO Paul Krutko said companies that are looking to expand are also raising the issue.

“For the most part in the conversations we’re having with companies that are considering growth, their concern is, can they find the talent they need for the workforce?” he said.

He added: “Our emphasis -- and I think you’re seeing it also from the Michigan Economic Development Corporation -- is a real focus on matching the talent to those jobs.” business news director Nathan Bomey contributed to this report.

Lizzy Alfs is a business reporter for Reach her at 734-623-2584 or email her at Follow her on Twitter at



Fri, Mar 30, 2012 : 6:55 p.m.

Perhaps these companies that keep telling us that they can't find qualified workers should start sponsoring university training programs ( tuition reimbursements for labor). Most of the people I know had to learn their job after graduating not many ( outside health care) are job ready after graduation.


Sat, Mar 31, 2012 : 1:10 a.m.

I wish I could vote for this a million times.


Fri, Mar 30, 2012 : 6:45 p.m.

Sorry, but I've seen way too many classified ads that state "Min. wage, batch. deg. required" to believe most of this. We've got PLENTY of skilled workers who will gladly go back to work if you make it worth their time. Quit paying upper management, start paying your WORKERS, and you'll have no problem finding qualified candidates for every position.


Fri, Mar 30, 2012 : 5:47 p.m.

If you were to announce a job fair tomorrow for people over the age of 55 with a technical degree and unemployed in SE Michigan. The big house could not hold all the people who would attend. The talent is there, the employers don't want it, too old, unemployed too long.


Fri, Mar 30, 2012 : 4:50 p.m.

Won't that be nice. Have fun storming the castle.

Christin Cave

Fri, Mar 30, 2012 : 2:05 p.m.

i read the article, but it doesn't point at the sectors predicted to have labor shortages or the types of skills that are high demand...


Fri, Mar 30, 2012 : 1:58 p.m.

It's utterly ridiculous to suggest we don't have the manpower to meet demands in Michigan when at least half of our high tech work force sits idle. There is no shortage of qualified people. The problem is discriminatory hiring practices that screen out fully older local workers in favor of young foreign workers.

Dog Guy

Fri, Mar 30, 2012 : 1:31 p.m.

Some occupations fare better than others in an economic depression--Keynesian economists, for example.


Fri, Mar 30, 2012 : 12:58 p.m.

I think what confuses me is that on these very pages we have been told that Ann Arbor is a "socialist Mecca", and that socialism is a failure. How is it possible then that Wash County has one of the lowest unemployment rates in the state? If this theory of A2 being a Marxist stronghold had any teeth then the surrounding area should be a wastleland. Instead we have steady and rising home values ("the market" at work), low vacancy rates in commercial properties in A2 and companies hiring new employees.


Fri, Mar 30, 2012 : 7:44 p.m.

@ nekm1 "Folks in the Kremlin lived pretty well also, on the backs of all of the peasants that paid the taxes that the privileged lived on"...Are you sure you are talking about the Kremlin? That statement kinda sounds like what the Elitest Repubican crowd has on the agenda. Oh...I know they make money offshore and the like...but it is off the backs of us peasants.


Fri, Mar 30, 2012 : 6:46 p.m.

Remember the Pfizer layoffs in 2007? That was private sector layoffs.


Fri, Mar 30, 2012 : 6:42 p.m.

" The state of Michigan, the taxpayers, support Ann Arbor." I live and work in Ann Arbor for a private business. State of Michigan is not supporting me. Where do you get the number that all Ann Arbor residents work for the government only and not private sector?


Fri, Mar 30, 2012 : 1:53 p.m.

NEKM, if you notice, there are LOTS of non-government businesses in and around A2. Many of them live off of the money spent by those evil gubment employees. We can debate the economics of "recycled money", that is a reasonable debate. But, there is more going on in and around A2 than gubment work. There are private spin-offs that create jobs and revenue, there are literally thousands of small businesses in the area. Not a single one of these businesses has production quotas set by the "socialists" in our local govt. I tell ya, living in this area is just pure Hell, isn't it? I can see Peoples discontent as they flee the area and home prices plummet. Or, is it the opposite?


Fri, Mar 30, 2012 : 1:15 p.m.

Clownfish, Last time I checked, Ann Arbor is NOT Washtenaw County. Ann Arbor may be a PART of Washtenaw County, but it is not ALL of Washtenaw County.


Fri, Mar 30, 2012 : 1:14 p.m.

Clownfish, you must live in a lead box. The state of Michigan, the taxpayers, support Ann Arbor. Where do you think the US Government Grants come from, fairy land? Folks in the Kremlin lived pretty well also, on the backs of all of the peasants that paid the taxes that the privileged lived on. You can't be that thick that you don't get it.


Fri, Mar 30, 2012 : 12:40 p.m.

Baloney. We're here, we're educated, we would like to work. But you think that we're too old or, my favorite, we've been unemployed too long. What does that mean? "Retraining" is baloney. I've done it, twice, but I'm still too old and I'm still unemployed. My life goal is now to die before I run out of money.


Fri, Mar 30, 2012 : 1:30 p.m.

Your comment sums it up 100%


Fri, Mar 30, 2012 : 12:03 p.m.

Labor shortages are likely since folk's have moved out of the state! There are a lot that have been re-programed to the service industry as well. We need manufacturing and who knows how many can still do that kind of work. It really is a shame IMO...


Fri, Mar 30, 2012 : 7:38 p.m.

Forever...I don't necessarily disagree with you. We do need diversity. But to my eyes manufacturing has been almost obliterated except for the auto industry. I believe we would be just fine if corporations had kept/built manufacturing here instead of shipping it across our borders. Remember the term "Arsenal of Democracy"? When an economy can sustain on supports hundreds of other fields that require college degree's.


Fri, Mar 30, 2012 : 1:03 p.m.

depending on one single industry such as manufacturing is what got the state in this mess in the first place. we had a large pool of singularly skilled workers for an industry that drastically cut demand for their skills. A diverse economy is the only long-term solution to economic stability for michigan. As for the exodus from the state that you refer to, a lot of that stems from the fact that, as a state, we have one of the higher rates of people with a college degree. That is training suited for industries other than manufacturing. Without the demand for their skills, they will inevitably leave. So, to stem the brain drain, you have to diversify your economy.

Les Gov

Fri, Mar 30, 2012 : 11:38 a.m.

OMG!! No wonder we are in such a mess...I knew the number was high..but ..per the Washtenaw County Economic Forecast....out of a workforce of a little less than 200,000 government employment represents a little less than 75,000 jobs!!! That mean about a third of the workforce is government related!!! One out of every three working people has to be paid with tax dollars!! How does a county, country, grow when a third of the working people represent the government instead of generating goods?


Fri, Mar 30, 2012 : 1:33 p.m.

It's called Socialism.


Fri, Mar 30, 2012 : 12:54 p.m.

It seems to be working pretty good around here, has for decades. Where did you get the 75k number? DO you know what a lot of these gubment people produce? An educated workforce! And, don't forget, we have been told for two decades that producing goods is no longer the American Way, we are now a "service economy". Many, many people employed don't produce "goods", and Other People want to cut their taxes.


Fri, Mar 30, 2012 : 11:27 a.m.

I have to wonder if this election year projections: I recently advertised an entry level Sat. Sun job with no benefits 16hrs a week; I had 137 people apply and these were skilled persons applying. Adults with lots of experience, a few years ago for this same position i would of gotten the teenagers and retirees applying. I'm not sure where all this optimistic news is coming from because the reality I saw for myself is there are a lot of over-qualified persons still looking for work - any work. just sayin


Fri, Mar 30, 2012 : 1 p.m.

It's less optimistic news and more of a reflection on how unemployment statistics don't truly cover the actual number of people who are out of work. As has been mentioned earlier in the comments, there is an issue of diminishing returns for laborers as they age, not to mention the fact that they become less desirable candidates for employment because their potential return to employers is less than the younger options.


Fri, Mar 30, 2012 : 11:26 a.m.

How about PROMOTING from within? Sorry, but far too many 55+ (and older) managers think that the world is going to fall apart when they retire in a few years (yes, I've been to far too many meetings, workshops, seminars, and conferences where they bemoan the Death of their Dept/Project/Business etc.) All the while the folks in their 30s and 40s are still being treated like bratty kids, even though they shoulder the brunt of the work, work long hours, and with little pay incentives...I call BS on "labor shortages", I call it what it is: failure of leadership/mentoring. Now for lab work and engineering, time to buckle on the boots and hire some students out of school -- again, there is a failure of leadership and mentoring...time to INVEST in your workers instead of throwing them away.

Marshall Applewhite

Fri, Mar 30, 2012 : 7:12 p.m.

I couldn't agree with you more. The baby boom generation seems very intent on leaving everything in shambles once they exit the labor force.


Fri, Mar 30, 2012 : 11:19 a.m.

henerycain, perhaps then you can recommend to a nearly 54 Year old after working 31 years at general motors and loosing much , and the great goverment want to tax me into poor house if IO retire early what should I do? Go to school for 3 years and retire after school? There is a fact of diminishing returns, I wont see the investment. Why should the gov, tax me as I am unemployed, tax me after over 40 years in the labor market ,paying taxes and Social Security? Why do some get this as soon as they cross the river. I have no health care , no income and I worked my who;e life. What do you suggest for the thousands like me??????


Fri, Mar 30, 2012 : 12:58 p.m.

a single payer healthcare system and a strong social security system.