Lansing — Michigan’s population is expected to decline or slow in growth through 2030 after the Great Lakes State recorded its fifth consecutive year of more people dying than being born.
The population phenomenon of “natural decrease” — where deaths exceeded births — that began in 2020 has continued annually through 2024, even as migration to Michigan helped boost the overall population, said state demographer Jaclyn Butler.
“Population growth in the long term would require consistent and higher migration to offset steepening natural decrease,” said Butler on Friday at a gathering of economists, budget experts and lawmakers.
The continued trend, which economists warn could have negative consequences for the state’s future, is particularly perplexing given that 2020 marked the first time in Michigan’s recorded history since at least 1900 that the state experienced a natural decrease. During the first year of the trend, Michigan was ravaged by thousands of coronavirus-related deaths during the height of the pandemic.
Michigan was trending toward a natural decrease prior to the pandemic, but didn’t break the threshold of deaths outpacing births until 2020, according to the state demographer. The death and birth rates through 2024 are the most recent state data available. But U.S. Census Bureau estimates indicate deaths continued to outpace births in Michigan during the first six months of 2025.
Additionally, the state’s aging population, experts said Friday, has contributed to the state’s shrinking labor force, as more and more baby boomers retire from the workforce with fewer younger people to replace them. Michigan’s labor force has decreased every month since January 2025, said Wayne Rourke, director of labor market information for the Michigan Center for Data and Analytics.
“Historically, Michigan’s labor force rises and falls slowly with the long economic cycles,” Rourke said. “But this recent drop of more than 90,000 workers in one year is one of the steepest declines we’ve seen outside of a major event.”
The population and labor force trends were presented Friday to state lawmakers and budget forecasters as they held their biannual Consensus Revenue Estimating Conference, a meeting held at the Capitol to predict future tax revenues around which the state budget is built.
The meeting concluded with fiscal experts revising their state tax revenue predictions upward for the coming fiscal year, predicting overall revenue of $33.58 billion. Despite steady growth in state tax dollars, Michigan officials expressed concern Friday about an expected $1 billion shortfall, largely due to federal cuts baked into last year’s One Big Beautiful Bill Act.
“It’s going to require tough decisions to come into balance,” State Budget Director Jenn Flood said Friday.
Population, older workforce trends put pressure on state revenue
But experts warned — aside from any federal policy impacts to the state budget — the state’s aging workforce could eventually present its own challenges to Michigan’s bottom line, potentially depleting the state’s income tax revenue.
“If we, in the long term, have fewer working-age people, particularly as their share remains flat or declines, that could mean fewer people paying income tax and less revenue from payroll jobs,” Butler said.
While Michigan’s aging workforce is not unique to the nation, it is among the states with some of the largest shares of older individuals, Butler noted. Michigan’s median age of 40.1 years is the 13th highest in the nation, she said, and Michigan is among the top 15 states for its number of baby boomers.
Rourke noted that roughly a third of the state’s population was over the age of 55 as of 2024.
At the same time, the state’s population of residents ages 5 to 17 years old is expected to continue declining by about 280,000, or 18%, through 2050, Butler said.
State Rep. Ann Bollin, a Brighton Township Republican who chairs the House Appropriations Committee, said the population issues plaguing the state are “serious long-term challenges Michigan cannot ignore.”
“Our school-aged population is declining, and workforce participation is being impacted by lower birth rates and an aging population,” Bollin said in a statement. “If we want long-term economic strength, Michigan must do more to attract job creators, families and workers to our state and create an environment where people want to build their future here.”
Retirees keep ‘lid’ on Michigan’s unemployment rate
It’s the state’s aging population and the resultant increase in workers aging out of the labor force that appear to have kept a cap on the state’s ongoing 5% unemployment rate, said Gabriel Ehrlich, an economic forecaster and director of the University of Michigan’s Research Seminar in Quantitative Economics.
“You have to be officially a part of the labor force to be counted as unemployed,” Ehrlich said. “So the decline in the participation rate kept the lid on the unemployment rate even as the household employment count was falling. We expect the decline in Michigan’s labor force participation rate to continue as demographics work against us.”
That 5% unemployment rate, according to UM economists, is likely to remain steady through 2028 in part because of those retiring from the labor force.
The changes in workforce participation haven’t had immediate effects on this year’s tax revenue. State tax revenue overall grew slightly, despite decreases in the sales tax revenue due to the elimination of the sales tax on gas as part of a larger road funding deal.
In January, experts predicted state-level taxes for the 2026 fiscal year would bring in about $33.27 billion. But on Friday, they revised their estimates upward to $33.58 billion.
“Michigan’s revenues remain stable in the shadow of federal uncertainty,” state Treasurer Rachel Eubanks said.
At the federal level, real domestic product growth or inflation-adjusted economic output is expected to come in at about 2.2% in 2026, 2.1% in 2027 and 2% in 2028, according to economists.
Core inflation at the national level should ease through 2026 and return to a normal range in 2027, according to UM’s RSQE. Even with higher oil prices putting pressure on those rates, the geopolitical supply chain disruptions are expected to stay “relatively contained.”
Ehrlich noted the nation started at a “pretty low inflation-adjusted oil price” ahead of the Iran war-related spike when looking at historical trends, and that oil price is expected to decrease moving forward. The Brent price of oil was $109.11 per barrel later Friday afternoon, the world benchmark price.
Those predictions, said UM senior economist Yinou Zhang, are based on the expectation that tensions in Iran will not escalate further and that the Strait of Hormuz will open within the next few months.
Other risks that could affect the national predictions are policy decisions related to trade and fiscal policy and the impact of artificial intelligence, Zhang said.
eleblanc@detroitnews.com
This article originally appeared on The Detroit News: Michigan’s population equation is upside down. Economists are worried
Reporting by Beth LeBlanc, The Detroit News / The Detroit News
USA TODAY Network via Reuters Connect
