MSU: Michigan population loss cost $4.4 billion

AP News
Posted: Dec 03, 2009 8:01 AM

Michigan has lost $1.9 billion in economic activity and $2.5 billion in home equity value in three years because of population declines in 63 of its 83 counties, according to a Michigan State University study.

"When people leave town, so does their economic activity," lead author Soji Adelaja said in a statement. "This is especially true in a service economy, which depends upon people providing and needing services."

Service jobs in Michigan generated $208.2 billion in income in 2007, while manufacturing generated $54.1 billion, according to the report this week from the university's Land Policy Institute.

Michigan and Rhode Island were the only states to lose population in 2006-08, the report said. Michigan lost about 80,000 people in that time, and Rhode Island lost about 2,000, it said.

Michigan had about 10 million residents in 2008, about 90,000 less than it had in 2005, according to a Census Bureau estimate.

The Michigan State report analyzed the economic effect of the population change in the 63 Michigan counties that lost residents from 2005 to 2008.

The study estimated the counties lost about 16,000 jobs, $585 million in wages and $346 million in rent and other income from property as a result of the population decline.

Michigan is expected to lose 1 million jobs this decade, with about a third of those lost this year alone, according to a November report from the Pew Center on the States. About 268,000 of the lost jobs will be in the auto industry, the report said.

With more young people leaving the state for better opportunities elsewhere, Michigan's population will continue to age and its relative wealth decline, the Pew report said.