Economist sees more job losses coming

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Economist sees more job losses coming

Friday, December 12, 2008 By Chris KnapeThe Grand Rapids Press
GRAND RAPIDS -- Recovery from the recession may come more slowly than in the past, although West Michigan is better positioned to move forward than the rest of the state and some other areas of the nation.


That was the assessment of economist George Erickcek, of the Kalamazoo-based W.E. Upjohn Institute for Employment Research, during his annual forecast speech for The Right Place Inc. on Thursday.

He discouraged people from looking from at distressed financial markets simply as markets.

"You should look at them as a system," Erickcek said. "If a truck jackknifed on Int. 96, it doesn't matter if you're driving a Chevette or a Lexus, you're stuck."

He said 2009 is likely to see a 2.4 percent decline in employment in the Grand Rapids area after a flat 2008.

Erickcek forecasts a very small increase in 2010. Goods-producing jobs are expected to take the biggest hit, while service and government jobs are expected to be down slightly.

The outlook for the broader region, including Holland and Muskegon, showed similar overall expectations.

"Flat is good," he said, dryly.

Erickcek expects a timid goods-producing job rebound when the recession ends, likening it to the "job-loss" recovery the nation saw after the 2000 recession.



His forecast also suggested now is not a good time to start a business.

The silver lining is it could be worse. West Michigan's relatively steady downturn has been far less dramatic than the state's as a whole.

Meanwhile, the Grand Rapids area was the leader among 12 communities Erickcek compared in terms of job creation as a percentage of total employment.

"Grand Rapids is keeping pace with manufacturing job loss with the rest of the nation," he said.

"We are separate from the rest of the state. It's hard to make people see that, but we are."

Nevertheless, West Michigan's positive news is much harder to sell to companies whose first look at the state includes the far more dismal employment outlook on the east side of the state.

"If this forecast holds true, and let's hope we're wrong, that means 10 straight years of employment declines in our state," Erickcek said.

"When people outside the state look at the numbers, they see a state in decline. That has to make economic development much more difficult in West Michigan."