Saturday, March 18, 2006
Muskgon Chronicle
Dave Alexander, Business Editor

Muskegon leads all Michigan cities in a think tank's ranking of the nation's "Best Performing Cities," which is based on jobs, wages and high-tech sector growth.

The California-based Milken Institute's ranking places Muskegon at 129th among 179 small cities across the nation. The city scored better than Ann Arbor, which ranked 156th and led all Michigan communities among the 200 largest cities in the country.

The Milken Institute ranked the Holland-Grand Haven -- Ottawa County -- statistical area at 169. Surprisingly, Grand Rapids was listed at 193, one spot below Detroit at 192, and 10 spots below Gary, Ind., at 182.

While Florida cities dominated the top of the list, Michigan owned the bottom, which raises the question of whether the ranking speaks more about Muskegon or Michigan.

"It tells a lot about the state of the state; Michigan is lagging behind," said Cindy Larsen, president of the Muskegon Area Chamber of Commerce. "Muskegon continues to break away from the pack in the state and economically perform on par with the rest of the country."

Muskegon is not accustomed to leading Michigan communities on such national rankings. From the 1970s through the mid-1990s, the demise of the gray-iron foundry industry in Muskegon and its related auto parts manufacturers had Muskegon perennially finishing near the bottom of such lists.

Communities such as Ann Arbor, Grand Rapids and Kalamazoo led the state during those years. The tide has turned both for Michigan and Muskegon.

Consider Grand Rapids, which employed about 11,000 employees at furniture-maker Steelcase Inc. in the late 1990s and early 2000s. Today, Steelcase has about 5,000 workers. That and other job losses are seen in Grand Rapids' poor showing in the ranking.

Muskegon has stabilized and diversified its economy to the point that it is posting modest job gains over the past few years. At the same time, Michigan has been racked by auto-related jobs cuts, with more expected in coming months.

Other employers, however -- many tied to aerospace and defense contracting -- have been hiring in the past two years: L3 Communications, Howmet Castings and Johnson Technology.

The Milken Institute used data from the federal government to rank the nation's 379 metropolitan statistical areas, separating them into two population categories. The Muskegon-Norton Shores statistical area represents all of Muskegon County, which was not on Milken's 2004 list because in past years Muskegon County was part of a larger regional statistical area, which included Kent, Ottawa and Allegan counties.

The think tank analysts considered five-year and one-year job growth, five- and one-year wage growth and relative growth in the "high-tech" sector for each community. All of the statistics were compiled into a formula providing an "overall" index score.

Muskegon's best numbers were in five-year job growth and five-year high-tech sector growth; the lowest was in five-year wage growth. But overall, the Muskegon rankings were close to U.S. averages.

"I am pleased with what the ranking tells us about our technology and advanced manufacturing jobs," Larsen said. "I would suspect that the hospitality industry has played into our overall job growth. (Tourism) is an extremely labor-intensive business."

The 2005 list of "Best Performing Cities" is an indicator of where America's jobs are created and sustained, according to the Milken authors. The report points jobs seekers in Florida's direction.

The large-cities leader was Palm Bay-Melbourne-Titusville, Fla., home of the Kennedy Space Center. The small-cities leader was Fort Walton Beach-Crestview-Destin, Fla. Of the top 10 communities on both lists, eight of the 20 are in Florida.

"The state (of Florida) is creating jobs at a prodigious rate," said Ross DeVol, Milken director of regional economics and the study's lead author. "It has all of the making of a job-creating machine: Good weather, low costs, a growing population, strong tourism and little heavy manufacturing."

Many think of Michigan as home to bad weather, high costs, a declining population, weakened tourism and plenty of heavy manufacturing. The report's authors point out that the top-ranked large Midwest community was Madison, Wis., at 35th, while of the bottom 10, five were from Michigan and four from Ohio.

The Milken Institute is a "nonprofit, independent economic think tank" in Santa Monica, Calif., founded in 1991 and led today by Michael Milken.

Besides being one of the nation's largest philanthropists through the institute and a series of medical causes, Milken also is known as the "king of junk bonds," a creative and successful Wall Street financier who was sent to federal prison in the early 1990s for securities violations.