Michigan Unemployment Woes Continue Despite Millions Spent on 'Economic Growth'

A new report from the Kalamazoo-based Upjohn Institute found that millions of dollars in tax credits given away by the Michigan Economic Growth Authority created just 18,000 jobs over 11 years, according to The Detroit News. Michigan continues to lead the nation in unemployment.

The News cited Mackinac Center studies of MEGA that show the program has had "minimal effect on economic growth." Center scholars performed two extensive studies of MEGA and the Michigan Economic Development Corp., in 2005 and 2009.

The New York Times and WILX-TV10 in Lansing reported that Center analysts found fewer than one-third of the jobs the state claimed would be created through MEDC subsidies ever came to fruition. The Jackson Citizen Patriot, citing the Center studies, said "It's clear the numbers the state puts out each month are inflated."

A Detroit News editorial cites the Center studies that noted jobs created by MEGA grants cost $123,000 each and states that "creation of a business-friendly climate with lower taxes for all Michigan firms" is what will benefit Michigan.

A critique of the Upjohn report by Michael Hicks, an adjunct scholar with the Center who co-authored both MEGA studies, can be found here.

UPDATE: West Michigan Business Review today also noted research by Center scholars about the ineffectiveness of MEGA and the MEDC, as well as a push by legislators to eliminate the programs, which Michigan Capitol Confidential also covered. Michael LaFaive, director of the Morey Fiscal Policy Initiative, told the Adrian Daily Telegram that failure by politicians to follow up on abatements and favors they've granted prove that such things are only "jobs PR programs for those in power."

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