Today, unemployment in West Michigan is below 4 percent, suggesting a very strong underlying economy, and the region ranks high in several national studies of growth and quality of life. However, West Michigan still faces significant challenges. A skills mismatch has left many employers struggling to fill positions, even while working-age adults cannot find work or fail to move into higher-paying positions. The need for talent in West Michigan will only increase over time due to age demographics. Regardless of these successes and challenges, the region must be more successful in producing highly skilled workers that meet employer needs if it is going to remain competitive.
While West Michigan has increased the percentage of adults with post-secondary education, it lags behind top performing communities in the country. This study, commissioned by Talent 2025, a nonprofit organization dedicated to increasing the quality and quantity of talent in West Michigan, seeks to measure the impact of moving these measures (labor force participation rate and educational attainment) for families, the economy, and state and local tax revenue.
West Michigan’s business and community leaders have consistently sought to improve the region’s economy and quality of life for its residents through collaboration and partnerships, and have often looked across the country to study top performing communities for leading practices that could be replicated in the region. In that vein, this report models what the region would look like if it were a top performer. Specifically, the report contains estimates of the additional income that workers in the region would earn if the region had the same employment rate and education attainment as the Hartford (Connecticut) Combined Statistical Area (CSA). The Hartford CSA is a top performer and has been identified as a region that is a good aspirational model for West Michigan.
To be clear, West Michigan is not striving to be Hartford. The two regions are distinct, and although they both have a significant share of their economy engaged in manufacturing, their industry clusters are very different. They are also in different parts of the country and face different economic challenges. However, Hartford does provide a means of grounding aspirational assumptions. West Michigan is striving to increase the talent of its workforce and the share of its population that is employed. The economy of the Hartford CSA is similar enough that it provides a framework for what West Michigan could achieve as a top performer. It provides a concrete example of an achievable goal for the region.
The findings of this study estimate that improving West Michigan’s education and employment levels to those seen in a leading region would increase the area’s income by $3.7 billion (17 percent), or approximately $1,700 per capita. This improved economic performance would help spur a virtuous cycle. With increased education and employment levels, fewer residents would rely on social welfare programs and more households would overcome their struggles to provide basic necessities, and instead earn enough to live more comfortable lives.
Alongside these benefits, the additional tax revenues generated through improved economic performance could be redirected to address remaining employment barriers, helping to spur additional growth. Simulations that raise both employment and education rates to the level of the Hartford CSA estimate an increase in tax revenue of $170 million per year. Higher incomes would also reduce the region’s reliance on social welfare programs; however, since most of the funding for these programs comes from the federal government, little of the savings could be redirected into the region.
This report also addresses the barriers the region faces in trying to match the Hartford CSA’s level of employment and education. The analysis shows that employment rates for workers ages 56 to 65 are much lower in West Michigan than in Hartford, revealing a potential source of short-run talent for the Talent 2025 region. Other shorter-run strategies include addressing challenges with child care and transportation for Impact of Increasing Education and Employment Rates in West Michigan 5 low-income workers and better aligning education and training with industry needs. Over the longer run, increased investments in early childhood programs and improving the K–12 system are good strategies for addressing talent shortages.
A copy of the full report is available below.