| Leo the Dog |
Nov 25, 2009 4:56 PM |
Detroit in the Desert
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Originally Posted by PHX31
(Post 4565030)
That's not the truth at all. "Detroit in the Desert?" "Surrounded by miles of those subdivisions". A picture of a rotten pool that's obviously no where near Phoenix (unless Phoenix suddenly moved to the Florida Keys or Hawaii).
Compare Detroit's unemployment to Phoenix's unemployment. Compare anything you want. That post is nothing but someone that gets their jollies from sadomasochism.
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http://www.azcentral.com/business/ar...higan1125.html
Quote:
Tough times in Michigan, but Arizona may have it worse
68 comments by Betty Beard - Nov. 25, 2009 12:00 AM
The Arizona Republic
You know Arizona's economy is in bad shape when it ranks worse than Michigan's.
Even after years of mind-numbing hits to its construction industry, it's a jolt to realize Arizona has lost a larger percentage of jobs in this recession than Michigan, even as that state's auto-based economy continued to melt down.
The states share the dubious distinction of having two of the nation's most recession-scarred economies.
Arizona reports the highest percentage, 9.9 percent, of job losses in the country since the recession began in December 2007, according to the Economic Policy Institute. Michigan (9 percent) ranks No. 3, behind Arizona and Nevada (9.1 percent). Over the longer term, the states' trajectories have been markedly different. Arizona was the nation's first- or second-fastest growing state for at least 25 years through 2006. Michigan's auto industry has been in decline for 30 years.
That Arizona can be ranked alongside a state that is iconic for job loss underscores the seriousness of the its challenges.
The data took several Michigan residents by surprise.
"I think we here in the Midwest think of the Sun Belt states as doing very well since it seems that a lot of people move westward and relocate to the West and Southwest," said Bernie DeGroat, a spokesman for the University of Michigan at Ann Arbor.
"When I think of Arizona, I think, 'Oh, things are probably great in Arizona.' It has tourism, and I think of young, kind of vibrant people locating there for the abundance of jobs."
Profound similarity
Detroit is a Rust Belt, old-line manufacturing city known for blustery winters, strong unions, downsized factories and population losses.
Recession-era Phoenix is known for blazing summers, low wages, stunted residential and commercial growth and record foreclosures.
Although Arizona and Michigan economies are markedly different, they both have depended on, and been hurt by, a cyclical industry: auto manufacturing (Michigan) and growth and construction (Arizona).
Since the recession began, Michigan has lost 24 percent of its manufacturing jobs and Arizona has lost 36 percent of its construction jobs, according to U.S. Department of Labor data. John Hagen, economic-development director in Surprise who has related experience in Michigan and other Midwestern states, said both Arizona and Michigan need to diversify.
"In a funny way, both states face the same issue, which is economic restructuring," Hagen said.
Just as Michigan can't depend on the auto industry, Arizona can't count on population growth to boost its fortunes in the near future, Hagen said.
"I don't think we are going to have the rapid growth and speculation," he said. "The boom was built on cheap mortgage money and credit. There will be changes in the (financial) system."
Barry Broome, president and chief executive of the Greater Phoenix Economic Council and a former Michigan economic-development official, said, "The states . . . had very reliable long-term economic models that wove them into a sense of comfort and insulated them from the kinds of economic changes that other states have had to manage over time."
Marked differences
Patrick Anderson, an economist in Michigan, said the state's economy is so much worse than Arizona's that he doesn't think they can be compared. He also was surprised to hear of Arizona's high percentage of job losses.
"Michigan is different from all the other states," he said. "It went into a recession in 2001 and never emerged."
Although Michigan's latest jobless rate is 15.1 percent and has been in the double digits for 11 months, he said there are some areas with Great Depression-level rates of 20 percent or more.
An economic forecast last week from the University of Michigan predicts the state will continue losing jobs for the next two years, which would add up to 11 straight years of job losses. Until a few years ago, Arizona was adding jobs and population.
Art Egeler, a Traverse City, Mich., resident who winters in Mesa, said, "The economy in Michigan is really bad. It just didn't happen this last year. . . . Of course, when you lose your industry, especially your auto industry in the southern parts of the state, that hurts the whole state because (auto) parts are made in other areas of the state. "I don't think it's so severe here."
'Science state'
But Michigan's economy has strengths.
It has a strong manufacturing base with scientists, researchers and engineers, a foundation that conceivably could be shifted into making something other than cars.
In fact, only about 3 percent of Michigan workers are directly involved in making vehicles, although many more are involved in auxiliary businesses such as making steel or paint, said Dana Johnson, chief economist with Comerica Bank in Dallas and a close follower of Michigan's economy.
Broome said, "Michigan is a great science state. Up until a few years ago, Michigan was second only to California in research in the U.S."
In contrast, Arizona's construction-driven economy can't be as easily shifted into something else. It primarily depends on population growth, which the Urban Land Institute Arizona estimates has been flat for two years.
Broome said Arizona is less unionized and regulated than Michigan and has a more favorable business environment, especially for entrepreneurial startups.
And Arizona has been gaining a lot more people.
The U.S. Census Bureau estimates that from 2000 to 2008, Michigan grew 0.6 percent and Arizona 27 percent.
Hagen said, "I think it makes it more difficult to turn your community around if people are leaving or if it (population growth) is basically flat."
In any case, both states have their work cut out.
Johnson, a former Michigan resident, said, "I think Phoenix and Arizona together will bounce back reasonably well over the next couple of years, while I think it's going to be more of a struggle for Michigan."
He said that Michigan has begun to diversify and that the benefits soon will become more obvious.
"There is definitely some good stuff happening there," Johnson said. "But it has been completely overshadowed in the past five or six years by the terribly difficult adjustments going on in the auto sector."
As for Arizona, Broome said, it can diversify with a lot of work. "It is one thing to say you are going to diversify," he said. "It's another thing to say you are going to create from 100,000 to 150,000 new jobs in an industry you don't currently have much of a presence in. That is hard to do."
In the long run, Johnson is hopeful for both. "I think people tend to underestimate the dynamism of the American economy and its ability to adjust."
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