According to Casey Sumner of the Toledo Blade, Gov. Snyder said, “The role of government isn't to create jobs. Our role is to enable job creation to happen,” during a town hall meeting on Monday. However, the new budget of the State of Michigan includes $100 million for “business attraction and economic gardening” and $50 million for a film incentive program. Rather than cripple the job creation he desires, Gov. Snyder could best increase Michigan employment rates by abandoning such taxing initiatives and allowing free enterprise to thrive.
Over the past decade, Michigan has tried numerous times to attract jobs to the state through subsidies and preferential tax treatment, using programs such as MEGA and the Michigan Film Incentive. Government cannot give money, however, to any person or organization unless it first takes away money from another. Existing businesses pick up the tab for these programs, limiting their own potential for growth and new hiring.
Further, if a profitable business opportunity really existed in a market, then would businesses need preferential treatment to succeed? Government incentive programs often work to shift resources away from existing, successful ventures toward riskier, politically connected ones. Predictably, most similar historical efforts, including MEGA, have failed to deliver the promised jobs. By funneling resources away from successful existing businesses, government will only hurt job creation in the long run.
As Snyder recognized in his speech, Michigan’s government does not “owe” jobs to its citizens. There is nothing moral about arbitrarily taxing some companies and rewarding others. Rather, the true moral imperative facing our government is a question of fairness: Do we allow workers to keep the profits which they have legitimately earned, or do we tax those profits away? As Dr. Arthur Brooks noted in his latest book, “The Road to Freedom,” fairness does not mean equality of results. Rather, to be fair, the playing field should be leveled so businesses of real value may emerge profitable. Robbing the successful to promote growth elsewhere represents real unfairness.
Michigan’s policymakers should reduce or eliminate spending on “job creation” and “economic gardening.” These budget items, and many similar economic development programs, are both ineffective for job creation and morally unfair to the taxpayers who are forced to fund them. The free enterprise system — competition without favoritism, where individuals keep the rewards of their labor — represents both the most moral and the most efficacious method of job creation for Michigan.