Taking an in-depth look at Michigan largest employers

Crain’s Detroit Business recently published a list of Michigan’s 22 largest employers. Detroit’s Big Three still dominate our state with General Motors, Ford, and Fiat Chrysler taking the number one, two, and four spots in the state. The third largest employer is the State of Michigan, with some 45,000 employees.

One of the most striking impressions left by the list of major employers is the dominance of local service providers. Nine of the top 22 spots are occupied by health care systems as well as Blue Cross Blue Shield of Michigan. The State of Michigan, the U.S. Government, and the City of Detroit also make the list. Detroit Edison and Consumers Energy, our regulated utilities, place 17th and 21st on Crain’s list. The commonality of each of these employers is that their presence on the list has little to do with the business environment and much more to do with the need to provide services to the 10 million residents of our state. These employers are not bringing additional wealth to our state; they are operating on the wealth that already exists. Of course, from a local perspective, everyone would like to see a large number of well-paid medical providers moving into their neighborhood.

When scanning the Crain’s list companies – besides the Big Three – providing products and services sold to people outside our state, only two other companies stand out. Magna International, a parts supplier to the auto industry, is certainly enhancing the economy of our region and state. One of the most interesting companies on the list is Rock Ventures, which sits at number 13. Their 18,000 employees are selling financial services across the country and enriching our region and state in the process.

A few of the employers are in a bit more of a gray area when being viewed as an internal or external economic operation. The Federal Government could be a major driver for the state’s economy. Some states such as Virginia, benefit greatly by Federal expenditures. While the Federal Government is a major economic player in Macomb County through its defense spending, Michigan overall is not really seeing much more than a “fair share” when looking at the return of federal dollars coming back to our state.

Two other employers are also in the murky middle area – the University of Michigan and Michigan State University. These universities are ranked number five and 15 on the list of largest employers in the state. For the most part, the universities operate on state funds and in-state tuition. However, these universities, with national and international reputations, also bring in out-of-state students and their tuition dollars, as well as research funds from around the world. An even greater benefit to our state’s economy is determined by what happens to their graduates. Their graduates are the people who can really spur on economic growth when they stay in-state.

Of the 22 largest employers in the state, only five are predominantly drawing new resources and revenues into Michigan, with four manufacturing companies and one company selling financial services. The remaining 17 largest employers in the state provide services to those who live in the state, with nine companies that are health care related, six government related, and two regulated state utilities.

To grow the economy of the state and the wealth of citizens, we need to find more goods and services that can be sold outside of our state. The Crain’s list helps remind us of this very simple goal for our region and our state.