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This week, the Michigan League for Public Policy released a report to coincide with the Labor Day holiday. The goal was to share a current snapshot of Michigan's labor force and advocate for ways to better support the workers who make up the backbone of our state's economy.
The report shows that Michigan has some room for improvement when it comes to strengthening its workforce, which is especially important right now. With costs on the rise, 40% of Michigan families struggling to get by, and the shrinking manufacturing sector, we need strong policy solutions to boost the state's struggling labor economy. Pro-worker policies are crucial right now because more workers are being pushed into part-time jobs, hourly wage gaps are widening and fewer Michiganders than ever are part of organized labor.
According to the League's new report, Michigan's unemployment rate is the eighth highest in the nation at 5%, which is above the national average of 4.2%. Michigan's unemployment insurance exhaustion rate was also 30% this past June, which means nearly 1 in 3 people looking for jobs are running out of benefits before finding one, though this rate is beginning to trend downward. There are also 1.2 job seekers per job opening in Michigan, according to the latest data. Simply put: there are not enough jobs for everyone who needs one.
Hourly wage gaps are also a major issue in the state. The median hourly wage of Black Michiganders fell by 43 cents over the past year when factoring in inflation, worsening a widening gap between Black and white hourly wages in the state. The median white worker now takes home 23.4% more than the median Black worker. Female workers in Michigan also saw a dip in median wages of 16 cents in that same timeframe and are now earning 20.3% less per hour than the median male worker across the state. This data shows that Black workers and female workers, especially Black women who are disproportionately working tipped and other low-paying jobs, are being left behind as the affordability crisis continues to take its toll on hard-working people across the state and country.
While the inflation-adjusted Michigan median wage has increased by 8 cents over the past year, wages are simply not keeping up as basic necessities such as groceries, utilities and housing become more expensive than ever before. Right now, 26.3% of working Michiganders are not earning enough to afford basic living expenses and another 13.4% of struggling Michiganders fall below the federal poverty threshold. In Alpena, Presque Isle and Montmorency counties, poverty rates are even higher than the statewide rate at 18%, 14% and 18%, respectively. At the same time, the top 1% of earners in Michigan take home 21.3 times more than the bottom 99%.
Steep childcare costs are also playing a major role in workforce participation, with many parents and guardians choosing to leave jobs in the face of full-time center-based infant care costs averaging $14,064 per year in Michigan in 2025. And labor challenges have been further hindered by an ongoing decline in labor union participation, with just 14.2% of Michigan workers currently represented by a union.
Fixing Michigan's labor challenges won't be easy, but there is a path forward.
To support the workforce and build a stronger state economy, the League recommends the elimination of preemption, the protection of worker organizing rights, making Michigan's minimum wage a living wage, eliminating the harmful tipped wage and enacting a salary history ban so that wage discrimination that began early in a worker's career is not perpetuated when seeking new jobs. Increasing scholarship reimbursement for childcare facilities in order to improve childcare affordability and increase pay for childcare workers is also vitally important. The state can also clear other barriers to employment by investing in public transit, thoroughly funding schools, and reducing costs for post-secondary education and training so that Michiganders are prepared for future employment.