Wayne Rourke, Labor Market Information Director
Michigan’s labor market softened in 2025 after recording 20-year highs in metrics like payroll jobs and number of workers in the labor force in 2024. The state’s unemployment rate also rose to just over 5.0 percent after historically low rates in 2023 and 2024. Wages were higher, especially in typically lower paying occupations partially due to minimum wage increases. The demand for workers also rose, as more job openings were advertised while the number of unemployed individuals remained flat.
Payroll Jobs
- In 2025, Michigan average payroll jobs declined slightly after reaching a 20-year high in 2024.
- Annual average payroll jobs declined by 0.1 percent in Michigan, compared to a rise of 0.5 percent nationally. Fourteen other states lost jobs on average in 2025.
- Despite annual average job losses, employment growth was recorded in six of Michigan's 11 major industry sectors. Private education and health continued to show the strongest employment gains in 2025 while Manufacturing recorded the greatest decline.
Unemployment and Labor Force
- Michigan’s annual average unemployment rate was 5.2 percent during 2025, making it the third highest among states. In the first six months of 2026, the state’s rate has averaged 5.0 percent.
- Michigan’s household employment and labor force both decreased steadily throughout most of 2025. This trend continued in the first six months of 2026.
- Michigan's labor force participation rate trended downwards throughout 2025, reaching a three-year low during December.
Unemployment Insurance Claims
- In 2025, initial claims for unemployment insurance were typically lower while continued claims were generally higher than the previous year. This trend continued in early 2026.
- Compared to 2024, continued claims were less concentrated in Manufacturing and more spread across the economy.
- In 2025, a smaller share of claimants reached benefit exhaustion, but the average duration of benefit collection increased. These changes are partially due to Michigan’s maximum number of weeks an individual could collect benefits rising from 20 weeks to 26 weeks in April 2025.
Workforce Demographics
- Labor force participation rates increased for youth and prime-age workers in 2025, but declined for older adults.
- Michigan’s 2025 unemployment rate for males (5.3 percent) was similar to 2024 levels (5.4 percent), while the female unemployment rate increased from 3.7 percent in 2024 to 5.0 percent in 2025.
- The unemployment rate gap between white and Black workers widened to 5.8 percentage points in 2025, the largest gap since 2021.
Wages
- Michigan’s median hourly wage increased 2.0 percent, from $23.22 in 2024 to $23.69 in 2025. Average hourly earnings for private-sector workers rose 3.0 percent and slightly outpaced inflation.
- Michigan’s minimum wage increased to $12.48 in February 2025 and $13.73 in January 2026 ranking it 21st highest among states. The next scheduled increase to $15.00 in January 2027 corresponds to approximately 527,000 jobs in 2025.
- Wage gains occurred across all 10 prosperity regions. The share of jobs in occupations with median wages below $15 per hour declined to 12.0 percent in 2025, while the share in occupations paying $50 per hour or more increased to 11.9 percent.
Job Demand
- Michigan online job advertisements increased by 13 percent between 2024 and 2025.
- The number of unemployed individuals continued to outpace available jobs on average, though the gap has shrunk since 2024.
- Labor turnover was greater in Michigan in 2025 than the previous year, as both hires and separations increased.
