In the Battle for Jobs, Subsidy Programs Shoot Blanks

More subsidies won’t improve economy

Business Leaders for Michigan president and CEO Doug Rothwell points to economic competition between the states to justify a proposal for new Michigan taxpayer subsidies to certain businesses.

"But the reality is if they've got a machine gun and we've got a pistol, my gosh we're going to get killed here,” Rothwell told the Associated Press.

Yet Michigan’s economy is already thriving even without new corporate giveaways. The state has become a national leader in economic growth and job creation.

Michigan has added 545,000 jobs in the economic expansion that began in 2009, a 14.2 percent gain that is 13th-greatest nationwide, and most in the region.

Per capita personal income — a measure of how well-off residents are on average — increased 30.3 percent from the first quarter of 2010 to the third quarter of 2016, the most recent data available. That’s fourth among the states and also best in the region.

Stay Engaged

Receive our weekly emails!

Inflation-adjusted gross domestic product — a measure of how much the state economy produces — increased 16.3 percent during this time, the eighth-fastest nationwide and also best in the region.

Additional business favors (beyond the many that are already offered) are portrayed as weapons in the battle for jobs among the states. Regardless of their caliber, however, the subsidy programs Rothwell supports only shoot blanks. The programs are more about press releases than jobs; they invite corruption and they do not justify their costs. They create a pop and a flash, but no real impact. Michigan’s economy is doing well and adding or losing more subsidy programs won’t change that.


Related Articles:

Why Government Fails at Economic Development

Economic Interference Week

Michigan Employers Create Thousands of Jobs without the Aid of Politicians

Calls to Expand Michigan’s Economic Development Programs Fall Short

New Subsidies More about Political Development than Economic Development