A new study published by the Federal Reserve Bank of St.
Louis, called "Economic
Freedom and Employment Growth in the U.S. States," concludes that there is
a link between economic freedom and employment growth. Other studies have come
to the same conclusion. One of the things that makes this one different is its
findings on labor markets. The authors write: "In addition, we find that less
restrictive state and national government labor market policies have the
greatest impact on employment growth in U.S. states."
That conclusion doesn't bode well
for Michigan, which is known for having a relatively hostile labor climate and
which over the last 10 years has seen its overall national economic freedom
ranking tumble according to the periodic "Economic
Freedom of North America" report, published by the Fraser Institute in
Canada, and the "U.S.
Economic Freedom Index" published last by the Pacific Research Institute
The Fraser Institute's 2004 and
2008 editions show Michigan ranked 32nd and 39th, respectively, in economic freedom among the states. The 2008 PRI index reports
that Michigan's ranking fell from 27th in 1999 to 34th place in 2004, and to a dismal 43rd place in 2008. These years coincide
with the progressive meltdown of this state's economy and job market.
Certainly other factors have
contributed to Michigan's decline, but just as surely, the state's troubles have
been compounded by a series of economic freedom-destroying policy missteps,
such as a $1.4 billion tax hike in 2007.
Reversing our decline first
requires that we stop digging a deeper economic freedom hole, beginning with
the immediate and final entombment of Gov. Jennifer Granholm's latest tax hike
proposal. Climbing out will entail repealing the Michigan business tax
(and replacing its revenue with spending cuts and reforms), adopting a right-to-work law and reining in this
state's out-of-control environmental regulators.
Since opening its doors in 1988, the Mackinac Center has
provided evidence that increased economic freedom in Michigan is not just
necessary and desirable, but is a moral imperative. The St. Louis Fed study
suggests why, with the state's politicians pushing us ever further in the
opposite direction, residents shouldn't be surprised to learn that Michigan has
had the highest unemployment rate in the nation for 48 straight months.
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