Start of the 21st century marred by terrorism, Great Recession

The first decade of the 21st century was marred by the realization that Americans were not safe from terrorist attacks, as the 9/11 tragedy altered our lives in many ways. The terrorist attacks, two foreign wars and a national financial crisis marked much of the decade. The Great Recession meant economic uncertainty for many Americans, and with that, a growing lack of trust in government to make their lives better.

Michigan began the decade with outgoing Gov. John Engler issuing his first budget cutting Executive Order since taking office in 1991. A decade of mounting deficits was to follow, as Gov. Jennifer Granholm, in 1993, took the reins of a state struggling to rebound from another brief recession and facing a mounting structural deficit.

The economic tsunami that swept Michigan took a heavy toll. By the end of the decade, Michigan had lost over 440,000 jobs, housing values plummeted and foreclosures mounted, and earnings declined by over twice the national average. From April 2006 through April 2010—49 consecutive months – Michigan led the nation with the highest unemployment rate.

Throughout the decade the League’s work focused intensely on the economic dislocation faced by households across Michigan, and the enormous fiscal constraints faced by the state as needs continued to mount and the state’s infrastructure crumbled.

As tens of thousands of Michigan residents experienced unemployment, others became trapped in low-wage employment, earning wages that, on average, did not lift a family of four out of poverty. The League provided leadership in articulating the income that is actually needed to meet a family’s basic needs on an ongoing basis. The League’s highly successful publication, Economic Self-Sufficiency in Michigan: A Benchmark for Family Well-Being, served as a successful tool for discussing the importance of providing income supplements and work supports to families with low wages.

The League also drew attention to needed changes in the state’s unemployment insurance system. Partnering with the National Employment Law Project in 2002, the League produced Out of Date and Out of Reach: Michigan’s Unemployment System Needs Repair, which outlined to need to increase unemployment benefits and extend eligibility to low-wage and part-time workers. The League continued to advocate for improvements in the UI system and for extensions in federal UI benefits, as long-term unemployment became the norm.

League photo 2007Over the course of the decade the League advanced policy options through publication of Working Hard But Still Poor: An Agenda for Meeting the Needs of Michigan’s Low-Income Working Families (2004), a series of annual Labor Day reports, the quarterly Economic Security Bulletin and leadership on two federally mandated bodies, the workforce investment board (Council for Labor and Economic Growth) and the Medical Care Advisory Council, which advises the state’s Medicaid director.

The League also joined two additional national networks, the Annie E. Casey’s Workforce Measures Project (the League was one of five states selected) and the Working Poor Families Project funded by several national foundations, including the Annie E. Casey, Joyce and Ford foundations. These initiatives, and funding from the Joyce Foundation, enabled the League to delve more deeply into the need for education and training programs, particularly those that address the needs of workers with low educational and skill levels.

The state’s poor fiscal health cast a dark cloud over the entire decade, with each budget year beginning with a projected large deficit. In 2001 the League sounded an alarm as phased-in tax cuts enacted in 1999 threatened revenues needed for state services. The struggle to maintain a revenue base that was adequate, stable and fair continued throughout the ’00s as the League’s analyses informed the debate about a proposal to constitutionally limit state spending (StopOverspending—much like Colorado’s TABOR amendment) and a proposal to replace most of Michigan’s taxes with a flat consumption tax—the Fair Tax proposal). Numerous analyses, public policy forums, coalition leadership and annual publication of Tax Dollars at Work: Public Spending for Selected Health and Social Programs in Michigan were critical to abroad public education effort throughout the decade.

As the Great Recession consumed the nation and ravaged Michigan, the American Recovery and Reinvestment Act of 2009 offered a glimmer of hope for Michigan. Federal funds through the Act rescued the automobile industry, which was on the verge of collapse and key to the future of Michigan and the Midwest. It also funneled funds to Michigan for an array of programs that created new jobs and enabled thousands of workers to remain employed, rather than losing their jobs to budget cuts. Just after the Act took effect, the League sponsored a public policy forum that featured the director of Michigan’s Economic Recovery Office; forum attendees received up-to-date information about the distribution and use of funds in Michigan. The League also produced analyses of the impact of the Act in Michigan.

Despite the adverse environment throughout the decade, the League achieved several long-sought policy goals: extension of food stamp eligibility to single adults; an increase in the state’s minimum wage—the first in eight years; and enactment of a state Earned Income Tax Credit—passed in 2006 and effective in tax year 2008.

Organizationally, the League was fortunate to have the continued support of the foundation community and local United Ways, despite declines in assets and giving during the economic decline. The League undertook a comprehensive strategic planning process in 2002 that guided its work throughout the decade and, in 2007 with the retirement of Ann Marston, long-time staffer Sharon Parks assumed leadership of the organization, retiring in 2010. Gilda Z. Jacobs took over as president and CEO in 2011.

League photo 2011At the close of the decade, as stagnant state funding and retrenchment in public services eroded the social safety net, significant challenges loomed for Michigan residents still struggling to make ends meet, and for new Michigan policymakers charged with improving the state’s economy and the circumstances of its residents.

A century after it began, the League continues to pull citizens and groups together to address major public welfare issues of the day. In 2011, it helped launch the Michigan Consumers for Healthcare, a consumer advocacy organization helping to implement the Affordable Care Act, and the Prosperity Coalition,  a Kellogg-funded initiative to bring new voices to the table around the topic of vulnerable children and their families and racial equity.

— Sharon Parks

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