THE MI BRAIN DRAIN
Can MEDIA PRODUCTION INCENTIVES Slow the Flow?
Can the new proposed Michigan Tax Credits attract and retain the most desirable work force — i.e., the young and talented tech creatives — from leaving the state? We’re willing to bet on it, and so should our legislators.
Despite an uptick in the numbers in 2019, Michigan has steadily lost population since 2001 when the US went into recession. A year later, the US economy recovered, but according to Dr. Paul Isely, Associate Dean at Grand Valley State University and Professor of Economics, Michigan never really did.
Unfortunately, Michigan job opportunities for creatives have been overshadowed for decades in favor of positions supported by automobile manufacturing – but it’s time to change the dependence on one industry that has led to Michigan’s slow recovery not just from the 2007-2010 Great Recession, but the recent COVID pandemic.
According to a Detroit Free Press article in December of last year, the state lost residents for the second consecutive year, a loss of roughly 40,000 since the 2020 census.
Interestingly, right around that census year, Bridge Magazine noted : “Early data indicate those who are leaving the state tend to be younger and more educated, exactly the sort of residents Michigan leaders want to attract.”
Where are they going?
As far back as 2013, MLive reported that figures from the Detroit Regional Chamber revealed about 38 percent of those who left Michigan moved to Illinois, California and New York. It’s not a coincidence that the obviously-named website, “Best Places to Live and Work as a Moviemaker” identified New York and Lost Angeles to lead the list every year, “film capitals of the world, unmatched in influence, opportunity, and legend.” Throw in Chicago to explain Illinois, and mystery solved.
The president and CEO of Business Leaders for Michigan at the time of the MLive report, Doug Rothwell, noted, “Many of the job openings here (in Michigan) are in fields such as automotive manufacturing that aren't viewed as attractive options for students, despite the highly skilled opportunities they offer.” He added that the state needs to do a better job attracting recent graduates from other states to help temper the loss of Michigan-educated grads who leave.
Ten years later, not that much has changed. What impact could incentives make to stem the flow?
We asked Dr. Isely to run the numbers for us. He took a look at the industries that match media production jobs and used an economic model called IMPLAN to generate direct, indirect, and induced numbers – in other words, a sort of “What If” incentives were provided to stimulate industry growth here.
He and his colleague Dr. Christian Glupker, started with current figures to determine that the media production industry directly supports roughly 1,105 workers in Kent County. According to Isely, “Once we add indirect and induced spending this supports roughly 2,700 workers adding around $185 million to the counties GDP. This total affect generates approximately $9.3 million in taxes at the state and local levels.”
The next step was to hypothesize the potential of a state incentives program that would stimulate growth in the media production industry locally. Careful to state that the numbers are not a gold-plated prediction but merely more of that “What If” scenario, Isely stated, “If the industry were to grow by 10% these numbers would be 1,216 direct jobs, 3,050 workers supported, $203 million in GDP, and $10.3 million in taxes.”
Considering that there have been job losses over the last two years and more, Isely ran the figures based on industry numbers in 2014, when media production employment figures were higher. The “What If” scenario looked even better as a result. “If the industry were the size it was in 2014 these numbers would be 1,666 direct jobs, 4,410 workers supported, $305 million in GPD, and $15.3 million in taxes.”
In short, though Isely and Glupker are not, and do not wish to be seen as fortune tellers, there are potentially strong benefits to growing an industry that can provide an alternative to the heavy manufacturing emphasis of the past — and attract and retain younger, tech-savvy workers.
In fact, numbers compiled by ZipRecruiter using job and salary predictions from the Bureau of Labor Statistics to predict the best jobs for future college grads show a heavy emphasis on tech in every field. That includes growth in professions in the medical fields, education, business finance and project management, marketing, especially online, and software design. And if there is a business today without a digital component, it has to be exceedingly rare.
Despite the significant growth in tech jobs, Isely cautions that it is still not an easy sell to encourage a transition beyond manufacturing, which itself depends heavily on digital applications. He cautions, “Although sizable (the potential growth of the media production industry), remember the same size increase in jobs in manufacturing is 5 times more powerful in economic output.”
But if young people continue to leave in search of jobs more interesting elsewhere, the evidence suggests that Michigan could reverse that flow -- simply by supporting the kind of growth industry here that offers a technical, digital sweet spot for attracting and retaining precisely those young, savvy tech, creatives — Michigan’s highly desirable workers.