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Destination USA: Michigan
Michigan, historically known as the hub of the U.S. automotive industry, has evolved into a diversified, innovation-driven economy. The state’s strategic location, skilled workforce, business-friendly policies, and lower costs of living and doing business make it an attractive destination for companies across sectors.
What do you know about Michigan?
Michigan's GDP is $608 billion
States workforce is 4.8 million workers
Average Salary for STEM workers is $89,780
$73.7 billion in annual trade with Canada
Home to 96 of the top 100 automotive suppliers
The USA Employment Market
The Fair Labor Standards Act (FLSA) governs key aspects of employment, including:
Minimum Wage: Establishes a minimum hourly wage for most workers.
Overtime Pay: Requires overtime pay (1.5 times the regular rate) for hours worked exceeding 40 in a workweek.
State and local laws may further regulate wages and working conditions.
The United States observes several federal holidays, including New Year’s Day, Independence Day, Thanksgiving Day, and Christmas Day. States and individual employers may recognize additional holidays. While federal holidays are recognized, employers are not legally obligated to provide paid time off for them.
Family and Medical Leave Act (FMLA): Allows eligible employees to take up to 12 weeks of unpaid, job-protected leave for:
Birth or adoption of a child.
Caring for a family member with a serious health condition.
Medical leave due to the employee’s own serious health condition.
State and Local Leave Laws: Some jurisdictions offer paid sick leave, parental leave, or other forms of leave beyond FMLA.
At-Will Employment:
Most US employment is “at-will,” meaning employers can generally terminate employment at any time for any reason (except for illegal reasons).
Exceptions: Some states, such as Montana and Puerto Rico, have limitations on at-will employment.
Workers’ Compensation: Employers are required to provide workers’ compensation insurance to cover work-related injuries or illnesses.
Unemployment Insurance: Employers contribute to state funds that provide benefits to eligible unemployed workers.
Health Insurance: Large employers (50 or more full-time employees) are generally required to offer health insurance coverage under the Affordable Care Act.
Why Michigan, USA?
Michigan has transformed into a dynamic hub for innovation, manufacturing, and technological advancements. Once heavily reliant on the automotive industry, the state has diversified into technology, life sciences, aerospace, and more, making it an attractive option for businesses seeking to expand.
Market Opportunity in Michigan
Economic Growth: Michigan’s GDP in 2022 was $608.1 billion, ranking it 13th among U.S. states. The state has demonstrated steady economic growth, with key contributions from sectors like advanced manufacturing, technology, healthcare, and logistics. The Michigan Economic Development Corporation (MEDC) reports that Michigan’s economy grew at an annual rate of 3.1% from 2021 to 2022.
Diverse Industry Sectors:
- Automotive: Michigan is the automotive capital of the U.S., home to 96 of the top 100 automotive suppliers. In 2023, the automotive industry contributed over $225 billion to the state’s economy, accounting for nearly 20% of Michigan’s GDP. Michigan is also leading the transition to electric vehicles (EVs), with over $16 billion in EV-related investments announced between 2020 and 2023.
- Technology: Michigan is quickly becoming a tech hub, with 31% growth in IT jobs over the past decade. Detroit and Ann Arbor have become centers for innovation, particularly in sectors like artificial intelligence, mobility, and cybersecurity. Grand Rapids ranks as one of the top emerging tech cities in the Midwest.
- Healthcare & Life Sciences: Michigan’s healthcare and life sciences industry employs over 400,000 workers and is supported by world-class research institutions like the University of Michigan and the Van Andel Institute. The healthcare sector contributes $65 billion annually to the state’s economy.
- Aerospace & Defense: The state is home to 600 aerospace companies, contributing $10 billion to the economy annually. Michigan is a major player in defense contracts, ranking among the top 10 states in the U.S.
Proximity to Key Markets:
Michigan’s location provides easy access to both U.S. and Canadian markets. Michigan handles $73.7 billion in annual trade with Canada, its largest international trading partner. Detroit, situated on the U.S.-Canada border, offers a strategic advantage for companies looking to access North American markets.
Workforce & Talent Pool
Michigan has a highly educated and skilled workforce, particularly in engineering, manufacturing, and tech sectors.
Workforce Size: Michigan has a labor force of 4.8 million workers, and a STEM workforce of 358,000 professionals. This ranks Michigan in the top 10 states for STEM graduates, making it an ideal location for industries that rely on technical expertise.
Education and Training:
- University of Michigan ranks 3rd globally in R&D spending, with $1.7 billion annually, contributing to the state’s highly skilled workforce.
- Michigan State University and Wayne State University are also leading research institutions contributing to workforce development and innovation.
- Michigan’s network of community colleges and technical schools offers $30 million in annual workforce training grants, further enhancing the skill sets of its workers.
Competitive Labor Costs: Michigan offers a lower cost of living compared to coastal states, translating to more competitive wage rates. The median annual wage for STEM jobs in Michigan is $89,780, making it cost-effective for companies to hire top talent without the wage inflation seen in states like California or New York.
Incentives and Tax Environment
Michigan provides several tax incentives and credits designed to attract and retain businesses:
Michigan Business Development Program (MBDP): Offers grants and loans for businesses investing in job creation and facility expansion. In 2022 alone, the program supported 8,000 new jobs and $3 billion in private investment.
Michigan’s Corporate Income Tax: Set at a flat rate of 6%, one of the lowest in the Midwest.
Renaissance Zones: Businesses operating within designated Renaissance Zones receive substantial tax exemptions, including property tax and state business tax relief for up to 15 years.
Pure Michigan Business Connect (PMBC): A public-private initiative that has facilitated $12 billion in contracts between Michigan-based companies since its inception.
Infrastructure and Logistics
Transportation: Michigan boasts a highly integrated transportation network that includes 11,000 miles of highways, 4,500 miles of rail, and several major international airports. Detroit Metropolitan Airport (DTW) is one of the busiest U.S. hubs for international trade, and the Port of Detroit is a key asset for shipping on the Great Lakes.
Energy Infrastructure: Michigan’s energy costs are competitive, with a growing focus on renewable energy sources. The state has invested over $14 billion in renewable energy projects, including wind and solar.
Broadband Access: Michigan has invested in high-speed internet infrastructure, with 94% of households having access to broadband, critical for businesses in the tech and digital sectors.
Expanding operations in Michigan offers clear strategic benefits. With its robust economy, skilled workforce, competitive tax incentives, and access to critical North American markets, Michigan is an ideal location for businesses in advanced manufacturing, technology, healthcare, and more.
We can help you using our four key services:
1.
Employer of Record solutions in the US & UK. Allowing you to seemless employ US or UK workers during your expansion.
2.
HR Consulting for your company. We provide valuable expertise and strategic support to help businesses expanding to the US or UK.
3.
Our Conference Marketing solution, businesses can gain exposure through speaking at UK/US conferences.
4.
Our Business Development solution, provides expertise for business entering the US and UK markets. From EOR, HR, business development, visas to company formation.
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Minimum Wage: The UK has a National Minimum Wage and a National Living Wage, both of which vary by age. In 2024, the National Living Wage for workers aged 23 and over is £10.42 per hour.
Overtime Pay: While not legally required, employers must ensure that average pay for all hours worked meets minimum wage standards. Overtime rates are usually outlined in employment contracts.
The UK observes several public holidays, including New Year’s Day, Good Friday, Easter Monday, and Bank Holidays in May and August. Each nation within the UK (England, Scotland, Wales, and Northern Ireland) may have additional regional holidays.
Annual Leave: 5.6 weeks of paid leave per year (including bank holidays).
Sick Leave: Statutory Sick Pay (SSP) for up to 28 weeks.
Maternity/Paternity/Shared Parental Leave: Paid and unpaid leave options for parents.
Shared Parental Leave: Up to 50 weeks, with up to 37 weeks paid.
Parental Leave: Up to 18 weeks unpaid leave for each child.
Parental Bereavement Leave: Two weeks paid leave.
Dependants Leave: Reasonable unpaid time off for emergencies involving dependants.
Jury Service: Unpaid leave for the duration of jury service.
Common reasons for termination include:
Capability (job performance issues), Conduct (employee misconduct), Redundancy (job no longer needed), Statutory Illegality or Breach, Some Other Substantial Reason.
Employers must provide appropriate notice periods. Immediate dismissal is possible in cases of gross misconduct.
- Employer’s Liability Insurance: Covers employee injury or illness claims.
- Workplace Pensions: Employers must automatically enroll eligible employees in a workplace pension scheme and contribute.