Well, for Michigan, the bad news is kind of old hat, but it's worth reciting. Understanding the good news requires a bit of thought, but it is significantly more interesting.

First, the bad.

According to the most recent number from the U.S. Bureau of Labor Statistics, Michigan continues to lose the most jobs of any state and post the highest unemployment percentages in the nation.

Between April and May, we lost a net 55,500 jobs and posted an unemployment rate of 6.9 per cent. Over the year, unemployment increased in only three states -- and yes, we were one.

Dana Johnson, the balanced and sensible chief economist at Comerica, may have put it best: "Michigan is rapidly becoming a relatively poor state." Michigan's per person output fell from 96 per cent of the national average in 2003 to 89 per cent in 2006.

The state's Gross Domestic Product (GDP, the best measure of the output of the economy) declined by 0.5 per cent, while the nation as a whole expanded by 3.4 per cent. However, Johnson points out that Michigan's economic weakness was confined to just three industries -- manufacturing, construction and government.

They play a disproportionate role in this state's "misery index." Together, those three sectors accounted for more than 80 per cent of Michigan's net declines from 2003 to 2006, even though they only made up around 35 per cent of the state's GDP.

But enough bad news. Now for the better stuff. An EPIC/MRA poll released last week indicated that 300,000 to 600,000 Michigan residents were considering leaving the state. "That's practically a whole congressional district," said Ed Sarpolus, vice president of the polling firm. Michigan's U. S. House delegation is now at 15 members, down from our peak of 19 in the 1960's and 1970's.

That might mean we could lose another congressional seat after the next census. So what on earth is the good news?

Well, as scary as those numbers are on the surface, if you dig into the digits, it turns out the folks who are thinking of leaving are mostly less-educated, less-skilled and lower-earning.

For example, 9 per cent of those asked from Macomb County (where only 21 per cent of residents have a bachelor's degree or higher) said they felt certain they would move out of Michigan.

By contrast, no one surveyed from Oakland County (where 41 per cent of residents have a BA or higher) was planning to leave.

College kids are, by and large, planning to stay. The survey found only 7 per cent of those with college degrees planning to fly.

Meanwhile, those holding only high school diplomas were twice as likely to leave. Meanwhile, 18 per cent of those with no degree of any kind said they would be willing to move.

Nor is the solid middle class planning to head to Manitoba. Just 3 per cent of those earning between $75,000 and $100,000 were planning on leaving. But by contrast, those earning between $25,000 and $50,000 were six times as likely to report that they are discouraged and looking for sunnier pastures.

I certainly don't want to minimize the human pain and anguish felt by many, many Michiganders. But the plain fact is that Michigan is going to thrive if at all -- through our higher educated, more skilled people, and not the relatively unskilled.

The policy set by Gov. Jennifer Granholm and the Cherry Commission to improve educational results and double the number of college graduates within the next decade makes perfect sense.

More subtle but equally important is a paper prepared by Tom Ivacko, of the University of Michigan's Center for Local, State and Urban Policy (CLOSUP). Ivacko argues that the 20th century Michigan economic model of low-skill, high-wage manufacturing no longer works and that the only hope for a prosperous future is based on a knowledge economy. He concludes, "A critical component in establishing a sustainable and successful knowledge economy is human capital, a critical mass of talent based on a cultural context that promotes higher education and life-long learning, entrepreneurialism, innovation, risk-taking and diversity."

He recites U.S. Bureau of Labor Statistics data which show Michigan growth in employment and number of firms in knowledge economy sectors such as financial services, professional and business services, education and health services and so on.

Growth in these sectors is admittedly less robust than it is nationwide, but the data show noticeable growth in our economy that's all to easy to dismiss as a one state recession.

Ivacko's paper also points out that Michigan's economy is becoming more balanced and diversified than our history of top-heavy reliance on manufacturing.

He concludes, "Whereas the overwhelmingly negative portrayal of Michigan's economy over the last half-decade has resulted in a public sense of gloom and self-doubt, this report presents evidence of numerous positive developments occurring in the state economy... While there are certainly long-term struggles yet to come, there are also signs that Michigan is navigating an historic transformation between economic models, as its former industrial foundation gives way to a growing post-industrial knowledge economy."

All in all, the bad news is, well, bad. But it's beginning to be balanced by the good. There are all kinds of sad and cynical associations with the phrase, "light at the end of the tunnel" (used in connection with the war in Viet Nam.) Maybe it's accurate in our case.

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Phil Power is a longtime observer of politics, economics and education issues in Michigan. He would be pleased to hear from readers at ppower@hcnnet.com. Phil Power is president of the Center for Michigan. However, these opinions and others expressed in Phil Power's columns are individual opinions and do not in any way represent official policy positions of the Center for Michigan.