Will the Michigan economy affect UM quality?

Colleges and Universities A-Z University of Michigan
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<p>Accepted into engineering (OOS) in the fall and consider it a great option, however, many friends and family are wondering if the continuing downturn of the economy will affect the quality of education and/or available programming at UM. Their concerns seem to be mounting as the survival of major players in the auto industry is in doubt.</p>

<p>How tied in to the state economy and to local industry is the university overall and the school of engineering in particular? Is the school robustly endowed enough to not be seriously impacted?</p>

<p>This topic may have been covered before but any recent insights are greatly appreciated. (A quick search of previous posts didn't reveal much.)</p>

<p>Thanks!</p>

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<p>Michigan’s Economy has been in decline since the 1970s. That has not affected the university. In fact, the University has emerged much stronger and independent as a result of the state’s economic woes.</p>

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<p>Thanks for your reply Alexandre. I was not aware it had been in decline for the last 30 years. Would you be so kind to explain specifically how UM has emerged stronger? I don’t want to necessarily burden you with creating a lengthy supporting response so if you have a link to any info that would be great. Of course empirical examples are welcome as well.</p>

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<p>I could write a book on the subject, but I lack the time. </p>

<p>1) One of ways in which Michigan has strengthened its position over the years are in building ties with corporate recruiters across the nation and industries. In the 50s and 60s, the majority of Michigan students ended up working for the Big 3. For thelast decade, the Big 3 have barely made the list of the top 10 recruiters (in terms of numbers) on the Michigan campus. That honor has gone to Investment Banks in NYC, major tech companies (such as Google, Microsoft, Intel etc…) in the West Coast and giant corporations such as Boeing, GE, Lockheed etc… </p>

<p>Below are links to employment reports for the Michigan Business School (Ross) and the Michigan College of Engineering. In both cases, you can clearly see that the largest employers at Michigan have not been Michigan-based companies:</p>

<p>Ross figures, 2008 (scroll down to page 7 for placement information)
<a href=“Error 404! Page Not Found. - iMpact Web Portal”>http://www.bus.umich.edu/pdf/EmploymentProfile2008.pdf&lt;/a&gt;&lt;/p&gt;

<p>Ross figures, 2007 (scroll down to page 7 for placement information)
<a href=“Error 404! Page Not Found. - iMpact Web Portal”>http://www.bus.umich.edu/pdf/EmploymentProfile2007.pdf&lt;/a&gt;&lt;/p&gt;

<p>Ross figures, 2006 (scroll down to page 9 for placement information)
<a href=“Error 404! Page Not Found. - iMpact Web Portal”>http://www.bus.umich.edu/pdf/EmploymentProfile2006.pdf&lt;/a&gt;&lt;/p&gt;

<p>Ross figures, 2005 (scroll down to page 22 for placement information)
<a href=“Error 404! Page Not Found. - iMpact Web Portal”>http://www.bus.umich.edu/pdf/EmploymentProfile2005.pdf&lt;/a&gt;&lt;/p&gt;

<p>Ross figures, 2004 (scroll down to page 26 for placement information)
<a href=“Error 404! Page Not Found. - iMpact Web Portal”>http://www.bus.umich.edu/pdf/EmploymentProfile2004.pdf&lt;/a&gt;&lt;/p&gt;

<p>College of Engineering, 2008 (scroll down to page 10 for placement information)
<a href=“http://career.engin.umich.edu/annualReport/Annual_Report0708.pdf[/url]”>http://career.engin.umich.edu/annualReport/Annual_Report0708.pdf&lt;/a&gt;&lt;/p&gt;

<p>College of Engineering, 2007 (scroll down to page 10 for placement information)
<a href=“http://career.engin.umich.edu/annualReport/Annual_Report0607.pdf[/url]”>http://career.engin.umich.edu/annualReport/Annual_Report0607.pdf&lt;/a&gt;&lt;/p&gt;

<p>Michigan is one of the nation’s top 15 universities, particularly where academics and industry are concerned. Companies come from all over the world to recruit its graduates. I would not worry about the state of Michigan’s economy. The University of Michigan has positioned itself in a way that has made the campus one o fthe most strategic. As the numbers above clearly indicate, fewer than 10% of Michigan graduates end up working for Michigan-based companies. And one more thing, the state of Michigan’s Economy is not as bad as many people think.</p>

<p>2) Another way in which Michigan has improved its position over the years has been in the development of its endowment. In 1986, Michigan’s endowment stood at $250 million. It’s endowment was barely ranked among the top 25 in the nation. As of last June, Michigan’s endowment stood at $7.6 billion, the 6th largest university endowment in the nation. As of last June, only Harvard, Yale, Stanford, Princeton and MIT had larger endowments than Michigan’s. Michigan has experienced a 3,000%+ increase in endowment size over a 22 year period. No other university has come close. Duke, which enjoyed a 1,700% increase in endowment size over that period of time, is second. Only a handfull of universities have enjoyed more than a 1,000%increase in the size of their endowments.</p>

<p>[List</a> of colleges and universities in the United States by endowment - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment]List”>List of colleges and universities in the United States by endowment - Wikipedia)</p>

<p>There are plenty of other ways in which Michigan has strengthened its position, but I trust those two are sufficient.</p>

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<p>Wow! Thanks so much for your timely and comprehensive response. I appreciate the time you took to research and formulate your reply. I think this is important information for people considering UM especially when choices need to made about comparing school offers and the economic health of each school being considered. I look forward to exploring the links in greater detail.</p>

<p>I will send this info to my friends and family who have expressed concerns re: UM, one of whom, ironically, is a grandfather who graduated with an MBA from Ross in the 50s. Perhaps he hasn’t kept up with his alumni bulletins.</p>

<p>Thanks Alexandre!</p>

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<p>nooooo but you should go to sleep endventure pretty sure you’re still growing, especially since you are admitted to the COE, there is a 70% chance that you are a guy. (but you could be in another time zone) so let’s see, michigan has around 20% international students i supposed, so 80% domestic…lets see… so there’s a 56% chance you are a male living in the US at a growing age. please excuse my IOE statistical point of view…but point is, there’s a 56% chance you are a growing teenage who should be sleeping by now, so go sleep.</p>

<p>Did that sound like solving the typical “estimate the number of gas stations in US” questions they ask in consulting interviews?</p>

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<p>Pacific time zone…working on a project. Love your statistics. Now, off to bed.</p>

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<p>Great info Alexandre, thanks.</p>

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<p>Michigan’s economy has not been in decline for 30 years. Of course, it has been pretty boom or bust with the auto industry, if anyone remembers the 90s when the Big Three were flying high selling cash cow SUVs left and right, the economy in Michigan was great.</p>

<p>And Michigan’s economy not as bad as everyone thinks? The unemployment rate is 11.6%. Almost everyone in my family, friends’ parents, etc. has been forced into retirement or is worried about losing their job. And this is all before we even know what the end game is at GM, Ford, Chrysler. </p>

<p>U-M will continue to be a great school, but if the Big Three are allowed to collapse, Michigan is going to be an ugly, ugly place to live. You won’t want to be around here if GM goes down.</p>

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<p>^ exactly
and NO job is safe anymore. people are being layed off at every corporation. salaries have been frozen and finding a job in michigan is very difficult unless you’re like a doc.</p>

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<p>The economy is collapsing all over the country and around the globe. It’s not just in Michigan.</p>

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<p>But it’s worse in Michigan than any other place in the US and many other places in the world. That’s what happens when the industry a state built itself upon begins to collapse.</p>

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<p>The Economy in the state of Michigan has steadily declined over the last 30 years dsmo. Yes, there were a few good years in the 1997-2001 period, primarily thanks to an upbeat population purchasing cars on generous financing, but other than that, the Michigan Economy has slowly but surely deteriorated over the years. That is not to say that it won’t bounce back. The key is to modernize the auto industry. People are ALWAYS going to want cars, but the Detroit auto makers never evolved. Once they reform and restructure, I think you will see a steady and sustainable economic revival. Furthermore, the biotech industry is also picking up in Michigan. I am optimistic when it comes to the futureof the state.</p>

<p>And thoseof you who think Michigan’s economy is worse off than those in other states, think again. States like Nevada, Arizona, Florida, NY are taking a bigger hit. No need to mention the dozens of states that have never made progress in the first place, such as West Virginia, Mississippi, Kentucky etc… </p>

<p>But back to the OP’s question, regardless of what happens to the state Economy, the University of Michigan should be fine. Obviously, with a strong Economy, the University of Michigan can only benefit. However, the University has properly adjusted itself so as not to need the state’s backing.</p>

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<p>I think saying that this has been a “slow, steady” decline for 30 years is spinning the facts a bit. I do agree that Michigan’s economy worsened relative to other states over most of this time period though. I say this is a lot of spin because if you look at average incomes over the time period, Michigan held its own, ranked 15-20 or so through about 2000. Today, Michigan is 37th. So I wouldn’t say much of a slow, steady decline for 30 years…more of a rapid decline in the past 10. And it doesn’t look like things are going to get any better.</p>

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<p>dsmo, are you talking about average household income or average GDP per capita? In terms of average household income, you are right, Michigan has historically been around #20. Last time time I checked (less than a year ago), Michigan’s household income was close to $50,000 and still among the top 25 or so states.Now it terms of GDP per capita, Michigan is indeed in the mid 30s…and it has been there for some time. </p>

<p>Michigan’s unemployment rateof 11% is horrible. The entire work is bleeding right now. Europe’s unemployment rate is holding steady at 9%, but England and the US have hit the 8% mark and that is unusual. California’s unemployment rate of 10% is actually more alarming that Michigan’s unemployment rate of 11%. </p>

<p>At any rate, I do not agree with you about the future. I think Michigan has a hard road ahead, but in the long term, it is going to do well for itself.</p>

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<p>oooh, our unemployment went up again? i knew the national unemployment went up last month but i hadn’t heard about michigan’s yet. this sucks.</p>

<p>but i wouldn’t worry about umich. their endowment is huge, and they probably won’t be affected any more by this horrible economy than any other big university.</p>

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<p>While U-M stands to lose from the budget woes of companies which had formerly been generous partners with U-M, it also stands to gain from the state’s commitment to new investment in high technology. Michigan (the state) wants to be a leader in high-tech answers to breaking our petroleum dependence and decreasing carbon output. The state’s research universities will be a partner in that.</p>

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<p>It’s exciting that both the University and the state are committed to exploring ways to break petroleum dependence since one of my main areas of interest is sustainable energy resource development (focus of my ‘why engineering’ essay).</p>

<p>Does the state currently have a plan to attract these high-tech businesses into the area (tax incentives, etc) or will the University drive this forward given the state’s limited fiscal resources?</p>

<p>Thanks.</p>

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<p>Arizona is DEFINITELY not doing worse than Michigan. Actually, the whole Southwest is experiencing true growth. Michigan, however, experienced artificial growth in the nineties due to the ridiculous financing deals. I live in a suburb of Detroit, and there are neighborhoods that were booming and selling brand new houses for $300k. Now, because it is SO bad, people who bought those houses are selling them for $100k to $130k. Florida also has a horrible housing market, but the steady income from tourism keeps them relatively stable. I’m ignorant to most facts about Nevada, but a friend of mine’s Father just got a job in Reno because a company is creating many, many, many jobs there. Michigan’s economy is statistically the worst in the nation.</p>

<p>That tangent was probably unnecessary, but I like to keep facts straight. </p>

<p>To respond to the original topic, UM is in Ann Arbor, which is a microcosm of success. College towns generally don’t suffer from the same effects as other areas in the same state. Ann Arbor draws a different set of businesses with different mindsets, and as Alexandre’s statistics show, the University is going at an extreme level. By the way, I’m an in-state engineering admit, and I hope to see you around this fall (although, we won’t know that we are eachother)!</p>

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<p>manofwood, trust me, Arizona is tanking, so are Nevada, Florida, California and NY. The latter two will recover quickly, the other three will require a much longer recovery period. Wait for it and you will see what I mean.</p>

<p>As for Michigan, the state economy has already tanked. The state’s recovery will be slow and it is in the process of completely reinventing itself. The auto industry has not even started the restructuring and thatin of itself will take more than a decade. I am not saying things will turn around overnight. Things are going to get worse over the next 2-3 years before they start getting better. The first step is to transform the auto industry. When will it happen? Your guess is as good as mine. But two things are clear (in my opinion mind you):</p>

<p>1) The US Auto industry will not be allowed to fail.
2) The US Auto industry will be forced to restructure drastically in the next 12-24 months.</p>