Foreclosures Have Led to the Worst Socio-Economic Stress in Michigan

Foreclosures have led to economic stress that is naturally telling on the social scene. One of the worst affected states is Michigan. It ranks second as far as stress is concerned. Foreclosures are refusing to go away and shortfalls in the budget are compelling state employees to suffer unpaid days of leave. Thousand linked to automobile industry are concerned about how far they will benefit from the refashioned face of Chrysler and General Motors – just out of bankruptcy.

But the naked truth, as bluntly put by President Obama during his visit to Michigan last July, is that many of those who had lost their jobs during the previous nine years would not get it back. He said the jobs “won’t be coming back.”
In the stress index survey conducted by The Associated Press Michigan ranked second after California. Three indicators are taken into account – foreclosures, loss of jobs and bankruptcies. These are used to measure how the recession is telling on 3,000 counties of USA. The higher the number the worse is the impact. Crossing 11 is counted as being under stress. 36% of the counties came under this category with counts often being more than 11. In Michigan, only 3 of its 83 counties are below the mark. Many inclusive of the counties of Wayne (Detroit) and Genesee (Flint) are over 20 counts.
Already 740,000 persons are jobless in Michigan. More numbers are being added each month. Michigan ranks seventh in the foreclosure rate race. In June there were 13,600 postings according to RealtyTrac. In Detroit value of property has fallen by 24% in one year as per the S&P/Case-Shiller Home Price Index. It is 56% less than what it was towards the end of 2005.
Patrick Anderson, economist from East Lansing said, “No other state has lost so many jobs, and lost them so quickly and apparently so permanently.” He opines that unless the employment scenario improves it is not possible for the economy to make a turnaround. It is doubtful if this change sill start until late 2010. He added, “People need to have jobs and good prospects of employment before they can borrow money, before they can start businesses and before they can pay their bills.”

From 2006 Michigan has had the highest unemployment rate. The gloomy forecasts are that the rate will shoot up to 15.2% before it starts inching downwards. Michigan regained fully after the recession of 2001. The bankruptcies staged last summer hastened the fall.

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