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Economic eye on 2020: Strong manufacturing employment, higher pay

Greg Chandler

Staff Writer

The economic picture for Barry County in next year appears to show continued strong manufacturing employment and increased wages for workers.

That's the view of Jim Robey, director of regional economic planning services at the W.E. Upjohn Institute for Employment Research in Kalamazoo. He presented his findings on the state of the economy, both on the local and national levels, Nov. 6 at the annual Barry County Economic Summit at the Hastings High School Performance Arts Center.

More than 3,800 people worked in manufacturing in Barry County in the first quarter of 2019, the most recent quarter for which statistics are available, he said. That's an increase of about 200 workers from the same period one year ago. Currently, one out of every three jobs in the county is in manufacturing.

“I really like places that make things,” Robey said, noting that the percentage of manufacturing jobs as part of the total workforce is much higher in Barry County than in the rest of Michigan and in the United States.

“Every year when we do a forecast for this region, we keep saying 'Don't expect big growth,' and you guys continue to knock it out of the park, making us look bad,” Robey said. “But that's better than making us look good.”

Travis Alden, the outgoing executive director of the Barry County Chamber of Commerce and Economic Development Alliance, said Robey offers a “wealth of experience and background in economic analysis.”

“While his economic forecast isn't quite looking into a crystal ball, it's pretty darn close,” Alden said.

Unemployment in the county was at 3.3 percent in August, below the statewide jobless rate of 4.3 percent. Meanwhile, the county's labor participation rate – the percentage of people 16 and older who are working or looking for work versus the total population of those 16 and older – was at 64.2 percent, higher than the statewide rate of 61.9 percent. That's also higher than neighboring Calhoun, Eaton, Ionia and Kalamazoo counties, but a little lower than Allegan County (68.8 percent) and Kent County (69.6 percent).

“People here want to work,” Robey said.

Weekly wages in Barry County continue to remain below state and federal averages. In the first quarter of 2019, the average wage of a worker in the county was $767, down from $835 in the fourth quarter of 2018, according to federal census figures.

Robey said there's an upside and a downside to the lower wages.

“It's a bad thing from the standpoint of affording housing and being able to put people in those more expensive houses,” Robey said. “But the good thing is it's good for employers, it's good for attracting and retaining people. It gives you a competitive advantage to [have] lower wages.”

But with low unemployment numbers, Robey said he expects to see that weekly average wage increase in 2020.

“I'm sure employers here are feeling the pressure from wages and need to increase wages to … attract people and retain people,” he said.

On a national scale, while the fundamentals of the economy look good – strong gross domestic product growth, low unemployment and reasonable rates of labor participation – there are some concerns, most notably with the federal debt and the possible impact it could have on interest rates.

“If interest rates do elevate, that's going to take a lot of wind out of the ability for firms to get money to grow, for individuals to get money to consume, but also you're going to have to pay a lot more taxes to cover the cost of that debt. It is huge,” Robey said.

The current economic recovery has been in place for more than 10 years, the longest recovery period in U.S. history. Robey said there may be some retraction in the economy coming soon, but it doesn't mean a recession is looming.

“Are we returning to trend, or are we returning to recession? I think the argument is we're returning to trend, at least in the near future, the near future being the next 12 to 18 months,” he said.

Other potential issues that could have an effect on the economy, Robey said, include trade wars and tariffs, as well as the volatility of the stock market. He noted that some businesses are already feeling the effects of trade disputes.

“Expansions don't get tired, rather they end due to policy mistakes,” Robey said.

More than 200 business and community leaders from throughout the county attended the summit, which included a panel discussion of best practices for enhancing workplace culture and a presentation by Jeff Disher, founder and president of DISHER, a Zeeland-based product development and business consulting firm.

 

 

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