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Michigan adds, loses thousands of jobs

By   /   February 4, 2015  /   No Comments

Photo by: Shutterstock

Photo by: Shutterstock

By James Hohman | Watchdog Opinion

Michigan has thousands of businesses that are constantly responding to people’s changing wants and needs. This means that the state economy is gaining and losing jobs simultaneously. But it also means that the state’s economic development strategies are unfit to meet their stated goals of improving Michigan’s job picture.

According to the Bureau of Labor Statistics, the state added 226,224 private-sector jobs in the second quarter of 2014 and lost 192,512 private-sector jobs. Both job creation and job loss figures increased from the previous quarter.

Over the same period, the Michigan Economic Development Corp. issued press releases stating that it had offered $16 million in incentives to companies to create 3,053 jobs. These numbers ought to be taken with a grain of salt since the state’s older programs have a poor record at turning announced jobs into actual jobs. And this does not account for the economic costs of the programs.

Even if all the jobs announced were created in the quarter that they were announced, the state incentives cover 1.3 percent of the number of jobs created. The magnitude of the continuous addition and loss of jobs show that the state’s efforts to generate economic growth through select incentives will not work.

A better option would be to eliminate the state’s $300 million a year select incentive programs. The state has other budget priorities and taxpayers could use some relief.

This piece was first published by the Mackinac Center.


James M. Hohman is assistant director of fiscal policy at the Mackinac Center for Public Policy. He holds a degree in economics from Northwood University in Midland, Mich.