Currently, Michigan still sits dead last in unemployment, with 10.6 percent of its labor force unemployed as of the end of 2008, according to the Bureau of Labor Statistics. This exceeds the national rate as of December 2008 by 3.4 percentage points, and that of this past January by 3. This trend has been observable since the beginning of the recent economic downturn, but it is not an unusual event in the state's economic history.
When it rains in Michigan, it pours, and sometimes, the levies break. During periods of negative economic growth, history has shown that Michigan almost always has more severe a reaction to negative growth than the nation as a whole. The greatest example occurred in the first two years of the Reagan administration, with the state reaching a record unemployment rate of 16.9 percent in November 1982. Though this number would dwindle gradually throughout the remainder of the decade, unemployment in Michigan still remained well above the national rate, and during 1991 and 1992, while the nation experienced yet another brief economic slump, Michigan once again was confronted with a downturn of its own that was significantly greater than the one plaguing the rest of the country.
The reason most often cited for Michigan's relative fragility is its dependence upon the automotive industry. Past recessions have caused general car sales to drop, though prior to the end of the past century the market share of Michigan automakers tended not to suffer, and when the economy came back, so did GM, Ford, and Chrysler. In recent years, however, the industry has not only been affected by economic conditions, but also by decreasing trends in the purchase of domestic vehicles, which are giving way to Japanese, Korean, and European products. This means that the jobs trimmed today from Michigan's auto comapnies and parts manufacturers are more than likely not coming back. Thus, one of two things must happen: Michigan automakers must revamp their products and practices to become more competitive, or the state must diversify its economy and lessen its dependence upon a dying industry.
Bureau of Labor Statistics