A New Report About Metro Detroit Is Out. Here Are 3 Takeaways

December 5, 2019

Detroit Free Press

John Gallagher 

The Detroit Regional Chamber released its latest annual State of the Region report Thursday, and I have three takeaways from it.

A rich compendium of facts and figures about the 11-county southeast Michigan region, the full report can be found at the website detroitchamber.com.

Useful as a guide and mirror of where metro Detroit finds itself, the packed report defies easy summary. But back to my top three points:

Economy taking a breather

First, the booming growth enjoyed in southeast Michigan and the state as a whole since the Great Recession has finally cooled a bit. Not dramatically so, nor are we in a new recession. It’s just that the above average growth of recent years cannot be sustained forever.

Sandy Baruah, president and CEO of the Chamber, acknowledged as much as he briefed the media Wednesday on the new report and emphasized the positive.

“Our regional economy continues to grow,” Baruah told reporters. “Jobs continue to grow. Per capita income’s on the rise. Median home values are strong and getting stronger. … Population is up slightly and that is a better direction than in past years. Labor force participation rate, poverty rates, all those have slightly improved in the new data.”

But he continued, “Over the last two years now we have seen some leveling off and in this year in particular we have noticed decreases for some key metrics, including exports, housing permits, foreign direct investment. And our unemployment has actually ticked up just slightly.”

Other data sources have made the same point. Economists generally agree Michigan’s economy will continue to expand for at least another couple of years. But there’s enough hints in the data of a little softening to start putting away a little extra for a rainy day.

Education woes remain a ‘flashing red light’

Second, the State of the Region makes clear that our biggest challenge, or what Baruah calls our “flashing red light,” is the failure of our education system.

Data in the report show that over the past five years, graduation rates in the region have been trending upward, slightly lagging behind the national average. But for city of Detroit students, graduation rates within four years have fallen 1% since 2014.

Then, too, fewer than 10% of city of Detroit high school students are considered college-ready, based on SAT scores above 1,060 or ACT of 21 or higher.

And southeast Michigan high school grads who reach for some post-high school education or train too often drop out. The Chamber report shows that 47% of regional high school grads and 73% of city of Detroit grads have not earned a degree or certificate within six years of enrollment.

And while there are some improvements in a few areas, Baruah added, “It is a very mixed picture. We lag our peers. We lag the nation.”

Given the stakes involved, for our young people and for a region that desperately needs a trained and educated workforce, we have got to put more thought and resources into training our kids for the future.

The region really needs to act like a region

And, third, the Chamber’s report makes me wonder whether this region acts often enough as, well, a region. That is, the disparate communities in the Chamber’s 11-county report too often remain riven by city-suburban rivalries or conflicts between the rural exurbs and the more densely populated communities closer to the center.

True, as Baruah told me, we’ve gotten better at cooperating. That’s especially true now that Democrat Dave Coulter has succeeded the late L. Brooks Patterson as Oakland County executive, smoothing the way for a more cooperative relationship with Democrats Warren Evans in Wayne County and Mike Duggan in Detroit.

“I have never seen the kind the high-level collaboration between the mayor and the three key county executives than I have just in these recent months,” Baruah said in response to my question. “I think that’s a hugely positive sign that we have leaders that are not just willing but are already showing demonstrable evidence that they’re working together.”

That will especially be true as these leaders shape a new referendum on regional transit for the 2020 ballot. They’ll need help from Gov. Gretchen Whitmer to get there.

“I think the big thing we’re going to be asking the state for now is support from the governor’s office for updated RTA (regional transit) legislation that will allow our regional leaders to put together a more flexible plan, and we’ve got that support from the governor’s office,” Baruah said.

My conclusion: I hope Sandy Baruah’s right about things looking better on regional transit and a host of other issues. For unless we start thinking of metro Detroit as our unified home, and less like a cluster of fractious competing communities, we’ll never achieve our full potential.

Read the article here

Study: Detroit Regional Economic Growth Slowing, Lagging Behind Nation/Peers

December 5, 2019

Crain’s Detroit Business

Dustin Walsh

Despite progress in recent years, Southeast Michigan continues to lag behind the nation in its economy, education, employment, population and other key indicators, according to the annual State of the Region report released Thursday by the Detroit Regional Chamber.

“Our regional economy continues to grow … but in many areas we lag our peers, we lag the nation,” Sandy Baruah, the chamber’s president and CEO, said in a call with reporters.

Key findings include:

  • The labor force participation rate of the Detroit MSA improved 0.3 percent in 2018, compared to 0.1 percent growth in the U.S. But Detroit remains the lowest among major metropolitans at 62.6 percent and below the national average of 63.3 percent.
  • Private sector job growth continues to lag, with the Detroit region growing 1.4 percent in 2018, below the national average of 1.9 percent. Between 2014-2018, private sector job growth in the region was 7.7 percent, but still below the national growth rate of 8.2 percent.
  • Per capita income growth for the region slowed last year at only 2.5 percent, versus the national average of 4.4 percent. However, the region outperformed the national growth rate of 17.1 percent between 2014-2018 with a growth rate of 18.2 percent.
  • Residential construction permits plummeted in 2018 by 29 percent in the Detroit region, compared to 3.6 percent growth nationally. Median home values continued to grow last year at 5.1 percent, but below the national average of 5.6 percent. Since 2014, however, the region outpaced the national average and peer cities including Cleveland, Chicago and Boston.
  • Population growth also slowed, down to 0.1 percent in 2018 compared to 0.6 percent nationally. However, millennial generation population growth exceeded the nation last year at 2.5 percent versus 0.8 percent.
  • The region continues to lag behind peer cities in educational attainment, with an annual increase in those with undergraduate and graduate degrees by 1.9 percent in 2018 versus 2.7 percent nationally. Only 40.7 percent of Michigan adults hold a college degree, below the national average of 41.2 percent and below cities like Cleveland, Chicago, St. Louis and Atlanta.
  • Despite increasing focus education and employment in science, technology, engineering and math, the Detroit region’s job growth in STEM is behind the nation at 1.4 percent in 2018 compared to 2.1 percent nationally. However, it’s outpaced the nation since 2014 with a growth rate of 10.6 versus 9.9 percent.

The state and region is also being negatively impacted by national issues, such as the White House’s various trade disputes, Baruah said.

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Detroit Chamber: Metro Students Must Finish Degrees to Find Good Jobs

December 4, 2019

Bridge Michigan

Alexandra Schmidt

Many Detroit-area students are not prepared to work where they live.

According to the Detroit Regional Chamber’s first-ever State of Education Report, released Thursday, students are dropping out of the region’s education system at every stage, resulting in a talent pool without the accreditations local employers want.

It’s a “flashing light” on the region’s dashboard, said Sandy Baruah, President and CEO of the Detroit Regional Chamber, at a Wednesday conference call about the report. “Our leaky education pipeline is a huge challenge for our region today and going forward.”

It’s a vexing issue that played out nationally in 2018 when Amazon bypassed billions of dollars in tax incentives to locate HQ2 in Detroit. The company cited concerns with the lack of skilled workers in the region, compounded by a fear the region’s lack of mass transit would hobble its ability to attract outside talent.

“In order for our businesses to succeed, for our economy to succeed, for our communities to succeed, we need people to fill those jobs,” Baruah said.

Completion rates lag behind enrollment

“One of the most impactful metrics we found” was the number of Detroit-area residents that don’t earn a postsecondary degree within six years, said Tammy Carnrike, chief operating officer at the Detroit Regional Chamber. That can be a major impediment in a job market that is increasingly demanding a credential beyond high school.

It’s not that students aren’t enrolling in postsecondary programs — it’s that they aren’t finishing them.

Across metro Detroit, students actually enroll in two- and four-year program at a slightly higher clip than across the nation. But across the region, nearly half of students who start a postsecondary degree have not completed it six years later.

Enrollment and completion rates are even lower for students from the city of Detroit specifically. Fifty-seven percent of city residents enroll in a postsecondary program after high school, compared to the national enrollment rate of 67 percent. Six years later, nearly three out of four students still haven’t completed their degree.

A web of factors contributes to these noncompletion rates.

Sometimes high school graduates are not ready for the increased rigor of college courses. Less than 10 percent of city of Detroit high schoolers are considered college-ready based on their ACT and SAT scores. This is lower than the regional average (36 percent), the statewide average (35 percent), and the national average (51 percent).

It’s an issue the chamber ran into with students participating in the chamber’s Detroit Promise program, which helps cover the cost of tuition and fees of postsecondary programs for Detroit graduates from the class of 2017 who meet certain residential and educational requirements.

“A lot of our two-year students who take advantage of free tuition take a lot of their credits in those two years taking remedial courses. And that’s an indicator they are not leaving high school with a level of postsecondary readiness,” said Baruah.

Some research shows that taking remedial courses actually makes students less likely to complete a postsecondary program, given that the courses demand time and financial resources that do not directly contribute college credits toward the completion of the degree.

Other times, life itself gets in the way.

Car repairs that sap tuition savings, food insecurity, unreliable childcare — all of life’s standard hurdles can get in the way of students completing their degrees. Recently, schools across the state have tried to help vulnerable college students overcome these bumps, from “life needs” scholarships to additional academic advising and community support, with some success.

The high number of residents not completing post-high school degrees has resulted in nearly 700,000 residents across the region who have some postsecondary credits, but no credentials to show for it.

Uncompleted degrees: hurdle or potential powerhouse?

The State of Education report highlights the high cost of lower educational attainment, both for students and the region.

Residents without a degree are less likely to get a job, and they make less money if they are employed. Eight-one percent of the region’s jobs went to candidates with some type of postsecondary credential since 2010, while sixty-nine percent of working-age Detroiters without a high school diploma are either unemployed or not in the workforce.

On top of this, many of the fastest growing parts of Detroit’s economy, such as engineering and business, require a two- or four-year degree that residents struggle to attain. This trend is expected to continue, and would widen the gap between the credentials that the region’s residents have and what local employers want from prospective workers.

The personal financial stress correlated with lower educational achievement is exacerbated for students who took out student loans for programs they didn’t finish. They may have the loan debt associated with a postsecondary degree, but not the wage boost associated with actually earning a degree.

It’s a situation faced by millions of Americans across the country, who are three times more likely to default on student loans than those who finish their degree.

On the flip side, said Carnrike, the nearly 700,000 adults across metro Detroit with an incomplete degree are closer to earning a certification than residents who have never started a program.

“It’s not just students coming out of school, but adults returning to school as well,” Carnrike said.

She says employers can play a major role in providing employees with the support necessary to return to school. Employers will have to start asking themselves, “What can I do to make it easier for my employees who haven’t earned their degrees?”

Metro Detroit has a lot to gain if employers start thinking that way, Carnrike said.

A 1 percent increase in the number of people earning a bachelor’s degree would increase the per-capita income in the region by $1,250, according to the chamber’s report. It also estimates that if the metro Detroit reaches a point where 60 percent of residents have a postsecondary credential by 2030, “the region will see an estimated return on investment of $42 billion.”

Chamber launches new compact

“As a business leader I am hearing a lot about” the lack of qualified home-grown talent, said Richard Hampson, Michigan president of Citizens Bank, at a conference call Wednesday to discuss the report.

“I think numbers like the $42 billion dollar [return on investment] … will get the attention of business leaders,” Hampson said.

While he says many businesses are already impacted by the issue and want to be a part of the solution, Hampson said “more visibility of the data” presented in the chamber’s report “will lead to more business leaders wanting to be a part of it.”

That is exactly what the chamber said it is hoping for.

“One of the first and foremost actions,” the chamber plans to take following the release of the report “will be putting together a compact” through their Detroit Drives Degrees Program, says Carnrike.

The chamber’s new Detroit Drives Degrees Talent Compact aims to be a collaborative effort among regional educational institutions, businesses and nonprofits to break down barriers to postsecondary educational attainment.

“All this information that we’re presenting is years and years built up. And we’re not going to be able to turn it around immediately,” Carnrike said, but “we have to do a better job” of “getting students into college and keeping them there.”

Read article here

Chamber Addresses House Transportation Committee on Regional Transit

Yesterday, the Michigan House Transportation Committee heard testimonies on House Bill 5229 which would amend the Municipal Partnership Act. This legislation would work to reinvigorate regional transit efforts in Southeastern Michigan and advance funding. Chamber Vice President of Government Relations Brad Williams testified before the committee, stating that the talent needs of Chamber member companies are dependent upon public transit to move people across cities.

This video is of testimony from the State of Michigan House of Representatives Transportation Committee and was originally livestreamed on House TV. Watch the full committee meeting here. 

Chamber Honors Wayne State University President M. Roy Wilson with “Excellence in Education Leadership Award”

The Detroit Regional Chamber founded the “Excellence in Education Leadership Award” to recognize educators who demonstrate outstanding public service and leadership on behalf of the region. The award was inspired by the legacy of the outgoing University of Michigan-Dearborn Chancellor, Daniel Little, who was the first recipient in 2018. This year, the Chamber’s Greg Handel, vice president of Education and Talent Initiatives will award Wayne State University (WSU) President M. Roy Wilson as the second inaugural recipient of the Excellence in Education Leadership Award.

President Wilson has demonstrated exceptional commitment to better serving his students – Detroit’s future talent base – and fulfilling the important role his institution has in catalyzing regional economic development. Under his leadership, WSU has garnered national attention for their new approaches that has lifted the university up as one of the most innovative universities in the country.

Notably, the Chamber recognizes President Wilson, Provost Whitfield and their colleagues for:

  • Achieving one of the nation’s fastest-growing graduation rates, while significantly reducing racial equity gaps at the same time;
  • Launching pioneering programs like Warrior Way Back to provide debt-forgiveness for adult returning students and the Heart of Detroit Tuition Pledge for Detroit high school graduates;
  • Advancing regional collaboration to improve education attainment through the Chamber’s Detroit Drives Degrees initiative. Wayne State has been instrumental in helping to scale change beyond even its own campus and led the way in earning Detroit’s distinction as a Lumina Foundation “Talent Hub.”

The award will be presented to President Wilson at an early reception during the Chamber’s State of the Region event, Detroit 2030: From Education Crisis to Talent Hub at Ford Field on Dec. 5. Learn more.

Member of The Month November 2019: WeWork Detroit Empowers Entrepreneurs, Small Businesses and Global Startups, Aiding in Growth and Success

Editor’s note: The Detroit Regional Chamber’s Member of the Month designation recognizes a Chamber member working to grow the regional economy through innovative leadership in alignment with the Chamber’s programs or policy agenda.

WeWork Detroit was named the Detroit Regional Chamber’s Member of the Month for November for helping to empower entrepreneurs, small businesses, and global startups in Detroit by providing its shared workspaces that encourage idea-sharing, conversation, and connections, aiding in growth and success.

In early 2017, WeWork Detroit opened its two downtown locations, on Woodward Ave. in Campus Martius and on Clifford Street in Merchant’s Row, offering a total of 11 floors of coworking space to an array of industries.

In just two years, WeWork Detroit has played a role in reviving the entrepreneurial spirit in Detroit and has also contributed to the city’s recognition as a hub of technology innovation.

In October 2017, WeWork Detroit, along with the Detroit Regional Chamber and the Michigan Economic Development Corp., launched the PlanetM Landing Zone. Throughout this partnership, mobility startups focused on connected, autonomous, shared, and electric vehicle technology have relocated to Detroit, gaining access to Michigan’s automotive industry, testing infrastructure, talent, and research. This partnership is the first of its kind for WeWork Detroit, which offers the mobility startups office space at its Clifford Street location.

“We’ve been grateful to partner with PlanetM and the Chamber for several years,” said Kyle Steiner, community director for WeWork Detroit. “Industry partners, international companies, and startups have all come through the Landing Zone and many have moved into additional space in WeWork on their own, but in close proximity to all the activity of the Landing Zone. It’s been great to see,” said Steiner.

This year, WeWork Detroit announced its plan to open a third location in Detroit’s New Center area, leasing 91,000 square feet at 6001 Cass Ave. The expansion doubles WeWork Detroit’s footprint in the city.

“By having a presence, a bit north of downtown, we are opening ourselves up to a new group of companies who may find the location more desirable,” said Steiner. He continued to say, “Techtown has been there for some time and created a hub of entrepreneurial buzz. Now, with the Michigan Mobility Institute in partnership with Wayne State, we are entering into a neighborhood of innovation. We really want to add to that narrative and be a resource however we can be.”

Regional Leaders Showcase How Employee Well-being Programs Can Boost Business and Economic Growth

The Chamber’s “The Business Case for Community Health” gathered expert leaders to discuss ways to create a healthier region and its significance for talent and business attraction and retention. The event presented key data on well-being and considered how creating workplace well-being programs can reduce health care spending, improve employee productivity and behaviors, and decrease absenteeism.

People who thrive in all five well-being areas – purpose, social, financial, community, and physical – experience 41% less unhealthy days and are more engaged at work. Businesses who engage in employee health send a strong message to their communities.

“Retaining employees matters,” said Jay Brown, director of corporate social responsibility and economic relations at RPM – The Driving Force in Logistics. “Keeping employees happy, healthy, and productive in their roles will prevent employers from spending money on hiring and training less frequently.”

Resiliency is another crucial element of good well-being and employee retention. Those with higher states of resiliency still feel stress, they are just better at accepting and reacting to that stress, said Cindy Bjorkquist, director of health and well-being programs for Blue Cross Blue Shield of Michigan. That’s why our goals as employers shouldn’t be to eliminate stress but help build resiliency to manage it, she said.

Employees working in the health system have a unique challenge surrounding well-being. It’s vital for patient-care providers to make their own health a priority so they are better equipped to deliver a high level of care to others. Otherwise, the results can be harmful.

“It’s the classic airplane example,” said Beth Thayer, director of the center for health promotion and disease prevention at Henry Ford Health System. “You must first secure your own oxygen mask so that you can assist others.”

Seeing the benefits of workplace well-being programs takes patience. When measuring workplace well-being programs, employers should consider a holistic approach, including reviewing specific employee results and the financial return on investment.

“We look at health assessments and achievement scores, of course, but we also think about preventative care, presenteeism, and lower rates of employee mistakes while on the job due to improved well-being,” said Kathy Forzely, director of the department of health and human services for Oakland County.

“There is a difference between outcomes and impacts,” said Brown. “Outcomes are how many people signed up for the wellness program. Impacts are the results you might not see for the next decade.”