Looming over tonight’s Republican debate in Dearborn, Mich., is the miserable condition of the state’s economy.

The size of the state’s labor force has shrunk six out of the last eight months, according to Michigan’s Department of Labor and Economic Growth. The state registered an unemployment rate of 7.4% in August, the highest in the nation. While the unemployment numbers are linked to cuts in the auto industry and residential construction, the state serves as America’s canary in a coalmine. Bad economic times in the Great Lake State can signal worsening economic conditions nationally.

In a presidential election cycle defined by foreign policy and the war in Iraq, economic issues could become more important both in the Republican primary and in the general election. Already, almost 70% of those polled by Zogby last month rated the economy as either fair or poor. Michigan’s leaders are determined to hold an early primary, currently scheduled for January 15, and economic issues will be front and center.

Michigan will be a battleground state in the November general election with blue-collar white males comprising a deciding demographic. The debate comes on the heels of a major tax increase in Michigan. Just last week, Michigan’s Democratic governor, Jennifer Granholm, signed an 11.5% increase in the income tax and expanded the state’s 6% sales tax to include some business services. Expect lots of debate on the size and shape of taxes, business incentives, and trade.

“It will be even more important for Republicans because Michigan is really hurting,” the executive director of the Club for Growth, David Keating, says. “It could be a national opportunity and a local opportunity.”

Such a dynamic makes for a tough first debate for Fred Thompson. Mr. Thompson drew kudos for opting to announce his presidential candidacy on the “Jay Leno Show” rather than competing at a debate last month in New Hampshire. That plan may backfire. Tonight Mr. Thompson, who often skirts over the details of policies, will have to offer specific solutions to the economic woes of Michigan and the nation.

With most of the pressure to succeed shifting to Mr. Thompson’s inaugural performance, considerable opportunity exists for Mitt Romney. Mr. Romney, whom some Michigan voters still remember as the son of the president of American Motors Corporation and a former Michigan governor, will likely tout his success in the private business world.

The one area in which Mr. Romney has been invulnerable is his status as a job creator in the private sector. Bain Capital, the investment firm he founded, is credited with funding Staples, Domino’s Pizza, and other companies. While Mr. Romney had some trouble bringing in new companies and jobs to Massachusetts, he fought tax increases in the midst of a budget crisis. At tonight’s debate, his Harvard Business School education and career as a consultant and venture capitalist will likely give him a high level of comfort and a chance to shine.

In recent days, the Romney campaign has been aggressively attacking the fiscal record of Rudy Giuliani when he was mayor. Spending in New York may have increased during Mr. Giuliani’s time as mayor, but the city also experienced an economic boom that took place during his tenure. Without Mr. Giuliani, it’s possible that New York may not have recovered from the doldrums of the David Dinkins Era.

Fred Siegel writes in “The Prince of The City: Giuliani, New York and the Genius of American Life” that financial services companies, such as Lehman Brothers and Merrill Lynch, were moving jobs out of the city prior to Mr. Giuliani’s election. Between 1994 and 2000, New York gained 84,000 jobs, according to Mr. Siegel, who concludes his discussion, “the combination of crime reduction, population growth, strong mayoral leadership coincided with the end of the transition out of a manufacturing economy.” Such achievements will give Mr. Giuliani something to talk about to voters in Michigan, where that transition is still, painfully, taking place.

And, for his part, Senator McCain, who won the state’s presidential primary in 2000, is expected to deliver a speech to the Detroit Economic Club this morning. Given Michigan’s status as an early primary state and swing state in a national election, the statements of the Republican candidates tonight could do a lot more than move the tracking polls in the primary. The Republicans will offer up solutions for Michigan that will indicate the direction of their economic policies for the entire nation.

Mr. Gitell (gitell.com) is a contributing editor of The New York Sun.