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Report: Aging crisis to cause Michigan to lose out on economic boom

A new University of Michigan economic report warns that the ‘long-term future has now arrived’ for the state, causing it to lose out on jobs from a national economic uptick. Photo via Shutterstock/Bridge Michigan.

Editor note: This story was originally published by Bridge Michigan��(bridgemi.com), a nonprofit and nonpartisan news organization. To get regular coverage from Bridge Michigan, sign up for a free Bridge Michigan newsletter ��().” 

by Paula Garner, Bridge Michigan

After years of warnings that Michigan aging workforce would harm its economy, the state is poised to learn what that looks like.

“That long-term future has now arrived,” University of Michigan economists say in a forecast released today.

Michigan is — once again — more likely to sit on the sidelines as the US gains jobs in 2026. It simply won’t have the workforce to fill new jobs, the U-M economists said.

“We have cautioned for years that Michigan aging and slowly growing population would eventually put a speed limit on job creation,” they said in their annual economic forecast.

The outlook is part of the comprehensive state and national forecasts presented this week at the  in Ann Arbor.

The deep dive into Michigan economic data comes from the team who works with the state of Michigan on its own financial forecasting. It includes economists Gabe Ehrlich and Don Grimes.

They and others — including the  — have noted for several years that population stagnation and an aging population 

“We’re not growing as a state, and 48 other states are growing faster than ours,” Eric Lupher, CEO of the Citizens Research Council, told Bridge Michigan.

“That doesn’t bode well for the talent in the state, or the workforce in the state, and it leaves an aging population that going to create talent issues.”

He continued: “The implications are huge.”

Michigan is thein the US, averaging 40.1 years. ������Ƶ a quarter of the . In a 2023 survey, more than a quarter of Michigan young adults said they 

Gov. Gretchen Whitmer created a growth office in 2024 to stem the losses, but thein this year state budget.

Meanwhile, Michigan economy, the economists wrote, “has hit a growth pause this fall.”

The federal government shutdown paused some economic data, but even without performance metrics for recent months “the story was confusing.” Uncertainty over tariffs and job counts made it difficult to get a read on the economy, even as jobs losses seemed to stack up.

In Michigan, the state officially recorded 24,100 new payroll jobs from the end of 2024 to August 2025, well ahead of expectations — but they’re expected to be revised downward. Another count of employed state residents declined by 18,700 over that time.

Looking ahead, the US is expected to gain jobs and maintain unemployment at about 4.5%, the economists said, following a bumpy 2025. National productivity should grow at an average 2.4% through the year, they added.

In comparison, they forecast 2,000 Michigan job losses in 2026, while the unemployment rate reaches 5.6%.

That the tepid outlook for the state when the national economic movement would normally support Michigan growth: Federal tax cuts, lower interest rates and policy support for the auto industry.

Instead, “the state will continue to face challenges in finding enough workers,” the economists said, blaming the aging population, along with .

The unremarkable look ahead for Michigan follows another report this week that suggested the state slide in educational outcomes and prosperity will require 

“Michigan in a New Era,” a roadmap for the next governor from Business Leaders for Michigan, found that while the nation has grown, Michigan:

• Ranks 50th in household income growth over the past 25 years
• Shows flat growth in high-wage professional jobs over 20 years, while they’ve grown 35% nationally
• Fell from 16th to 44th in fourth grade reading over 30 years
• Posts one of the highest  rates in the nation.

The business leaders report hones in on Michigan potential to overcome what Jeff Donofrio, the group CEO, called “decades of slow growth, industrial disruption, talent outmigration, and inconsistent policies” that have left the state playing catch-up as other states increase prosperity.

Indeed, the U-M economists targeted data that showed Michigan economic slide compared to the rest of the country.

Among the changes, the economists found, were manufacturing job declines that erased the sector and behind-the-curve growth in high-wage professional jobs.

But underlying all of it was the fact that Michigan residents are aging out of the workforce.

“If you don’t get an increase in the workforce, you can’t get growth. And if you don’t add jobs, you’re going to be limited in income gains,” Grimes said in 2023 when the CRC released a study of 

“The average family will have less wealth (comparatively) than the nation,” he said. “It going to be really hard to fix that problem.”

The outlook for Michigan economy “may seem underwhelming,” U-M economists said, “but these sorts of projections are likely to become the norm in the years to come unless there are fundamental changes to demographic trends.”

by Marsha Chartrand

Marsha Johnson Chartrand, a founder, writer, and copy editor with the Manchester Mirror, is a 50-year resident of Manchester. She has a long history of volunteer and community involvement.