by Annie Scott
April 16, 2009

Here’s what’s going on in a land far from the Mitten …

As a native Michigander living in Southern California, you catch plenty of derogatory talk about the Midwest.

There are the traditional derisive barbs and snobbery about the lack of sophistication in the “Fly-Over States” and the “Rust Belt.” Increasingly, though, I’ve also noticed loud and growing condescension toward Michigan — specifically Detroit —for its economic troubles. I’ve heard all of the following:

“That must be the most miserable place to live. How depressing.”

“So is Detroit really just a bunch of abandoned houses and rundown factories and empty warehouses all over the place?”

“See, that’s what happens when your entire state is geared around an industry that refuses to make what people want. They had it coming.”

“How can anyone live there? There are no jobs! You must be so glad you left.” (Always followed by laughter when I earnestly deny being in any way glad about that.)

“I just read Michigan is now ranked as the #1 worst state to live in. Is it really that bad?”

Yeah, the incessantly bleak picture painted by the national media certainly doesn’t help perceptions of folks living a couple thousand miles away.

I understand, of course, that although I hold a special place in my heart for Detroit and Michigan and tend to romanticize them in my mind, the picture is rather grim at present. What irks me, though, is that things out here on the west coast aren’t exactly rosy. The Golden State is looking and feeling pretty blue. Yet friends, neighbors and strangers persistently lament the dilapidated and deplorable state of Michigan’s economy, rarely mentioning the litany of problems just as serious out here.

Case in point: Yes, Michigan currently leads the unemployment rankings with 12.6 percent statewide. But California is close behind — joining Michigan in the “top 4” with 11.2 percent unemployment. And 11.2 percent in a state this huge is a staggering number of people out of work. Even more disturbing, in a few California counties the unemployment rate is in the mid-20s.

When I first heard the California numbers, they shocked me. I hadn’t considered California to be at risk for the same kinds of economic turmoil my mitten-shaped home state had been wrestling with for most of this decade. I certainly didn’t see it coming when I moved from D.C. to San Diego in early 2007.

I came here without any worries about being able to find a good job and a decent place to rent in a great neighborhood. I figured all of that was plentiful in this ultimate destination, America’s Finest City. After all, this was the place where so many high-tech, bio-tech, life sciences and a diversity of other innovative companies had set up shop, created great new jobs and revitalized the local economy. I did not anticipate that by the end of 2008, many of my friends here would be laid off and quality job listings would be in extraordinarily short supply.

In 2007, after all, it was alarmingly apparent that housing prices were grossly inflated and still on the rise around here. But I didn’t foresee the huge number of empty, foreclosed homes that would populate my street barely a year and a half later. I failed to guess that so many different, interconnected crises would create a downward spiral that eventually would consume the news, force out the neighbors on every side of our house and create financial hardship for most people I know.

California always seemed like an insulated bubble of perpetual good times; now I can see that The Golden State’s reality is just another chapter in the same dramatic story Michigan residents know all too well.

Many in California’s business community have their own worries. For fiscal years 2008 and 2009, California has ranked 48th overall in The Tax Foundation’s State Business Tax Climate Index. (Michigan is ranked 20th, up from 25th last year.) Lots of regulation, sky-high expenses, a monumental and highly publicized state budget crisis, legislative gridlock and toxic political tensions have resulted in a reputation for being not exactly business-friendly.

Of course, California will likely never be in real danger of losing all business interest, thanks to its other reputation — that of open-mindedness toward innovative ideas and entrepreneurship. But, as the Denver Post reported, the fact that California now faces a $42-billion state deficit, a one-cent sales tax increase for three years, a 12-cent gas tax increase and a doubled fee for vehicle licenses, means California’s businesses “are in a world of hurt and other states know that.”

Indeed, other states such as Colorado, Arizona and Utah have made no secret of the fact they covet California’s top business minds. This past Valentine’s Day, the Metro Denver Economic Development Corporation staged an over-the-top, $95,000 PR effort to woo California’s top corporate executive talent to its own companies. The campaign included a plane flying over Los Angeles freeways at rush hour trailing an 80-foot “Colorado loves CA” banner. To top it off, 500 flirtatious valentines cards were mailed to California executives in various industries. The cards read: “We’re a perfect match” and asked if the recipient was “ready for a relationship in a region that cares about the health and growth of its companies.”

How does California respond to such a ploy? In a Los Angeles Daily News article, the chairman of the San Fernando Valley Industry and Commerce Association, said: “I think what Colorado is doing is fair competition. If we had something to defend ourselves with, it would be a fair fight. But so far, we have not developed too much in the way of incentives to bring businesses to California or to retain them.” Less than 10 years ago, California was home to 82 percent of all filming in the United States. Today, thanks to incentives offered to the film industry by Michigan (35 new projects in 2008) and other states and countries, California accounts for only 30 percent of the nation’s shoots.

Gov. Granholm’s latest business-friendly move was signing legislation that creates additional refundable tax credits to boost development and production of advanced batteries. The governor says Michigan wants to be the advanced-battery capital of the world and home to a new generation of electric vehicles. California’s batteries seem a bit tired at the moment.

For all its challenges and turmoil, Michigan seems to have a slight leg up on California in terms of business-friendly climate. And perhaps it’s already starting to pay off. A good friend of mine who worked the Obama campaign in Detroit had been sitting around her new DC apartment for months, sending out hundreds of resumes and watching her meager savings deplete while waiting for the new administration to step up its hiring. She finally got offered a great new job last week. Where? In Detroit!

Her new favorite joke is that she is a demographic of one: People Moving to Michigan for Jobs.

With a little luck and a lot more smart policies and business decisions “back home,” that could be the new employment rate on the rise.

Annie Scott lives and works in San Diego and sends dispatches back to her beloved Michigan.