Unemployment Rate Difference of Michigan

¶ … unemployment rate difference of Michigan and Illinois? Michigan has an unemployment rate of 14.7% and Illinois has an unemployment rate of 10.9%.

Michigan and Illinois are both Midwestern states: yet Michigan's unemployment rate hovers around 14.7% while Illinois' unemployment hovers around the regional average of 10.9. The reason for this disparity is the fact that Michigan has long been dependant upon a single industry -- the auto industry -- for its survival. Michigan, and particularly its main manufacturing city of Detroit, has been economically battered by the failure of GM to remain competitive in the current economy. Because of the prosperity of the automotive industry in the 1990s, fueled by SUV-driven growth, GM, Chrysler, and to a lesser extent Ford failed to innovate their products. GM also signed contracts with the United Auto Workers (UAW) union that acted as a drain upon the company's coffers in terms of pensions and health insurance plans.

Because of the apparent security of GM employment, many Detroit-based workers failed to obtain training in other fields or even a college education. Thus, now that they are unemployed, they have fewer prospects than other individuals who have been recently let go because of the recession. Now, GM has been forced to 'shed' thousands of jobs in Michigan as a part of its bankruptcy proceedings. For example, one Pontiac Assembly plant in Pontiac, Michigan, "was running three consecutive eight-hour shifts, employing 3,000 people and making 1,300 trucks a day," in 2003, but in the summer of 2009, the plant had only 600 workers and "was running just one shift" (Mahler 2009, p.1). As a result of the failure of GM, the housing bubble, and the explosion of easy credit and 'creative' financing, many Michigan residents "have their homes foreclosed -- Detroit has one of the highest foreclosure rates in the nation" (Mahler 2009, p.2).