Portions of this text were taken from prepared remarks by the author, delivered April 10 at Northwood University in Midland, MI.

If you want to measure how public policies affect economies, you can refer to a number of excellent scholarly indexes. The United States Census Bureau publishes the Index of Economic Activity. The American Legislative Exchange Council publishes “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index,” which includes an index of state-specific economic competitiveness. The Tax Foundation publishes an index on state taxes. I’ve turned to all of these sources in my own work.

But one of the best sources is the Economic Freedom of North America index published by the Fraser Institute of Canada. It uses 10 policy variables in three major categories — labor, tax and government spending — as proxies for economic freedom. Economic Freedom, is defined by Fraser scholars as “the ability of individuals to act in the economic sphere free of undue restrictions.”

In the 2023 Fraser index, Michigan is ranked a lowly 31st. Coincidentally, Michigan’s economic performance, as ranked by the just released Rich States/Poor States analysis is also 31st. The two indexes are not directly comparable as they use different datasets, methodologies and time periods. Many of the results, however, should capture the readers’ attention. There are other parallels between sound economic policies and the findings of these reports and related academic scholarship.

For example, six of the top 10 states in the ALEC economic outlook rankings are also top 10 states in the Fraser report. The council ranks Florida number one in economic performance while the Fraser Institute says that Florida is the second most economically free in the nation. As an aside, Internal Revenue Service data indicate that Michigan loses more residents to Florida than to any other state. From 2020-2021, a net 7,800 people left the Great Lake State for the Sunshine State.

Where we end up in the Fraser index matters to our economy and our population. As one example, North American jurisdictions “with the least free quartile have an average per-capita income 2.1% below their country’s average while the most-free quartile was 3.7% above the country’s average.” While the reader may be tempted to dismiss this correlation, scholars have used the Fraser dataset in ways that minimize or control for simple correlations or coincidences.

University academics and others who have no dog in Michigan’s policy fights have published more than 370 articles that rely on the Fraser datasets. Most of those articles find positive connections between economic liberty and outcomes people desire, including economic growth, entrepreneurship, venture capital, lower unemployment and reduced poverty.

The Fraser study does not paint a positive picture of Michigan’s future, especially given the current policy context. Job growth numbers indicate that the state’s post-pandemic recovery is the 13th-slowest among the states. Most states quickly recovered all the jobs lost during the pandemic, but Michigan has only recently done so. The number of jobs in the state today is only 0.5% percent above its pre-pandemic level. The national average is more than 7 times that, at 3.6%.

Economists also use state Gross Domestic Product as a measure of economic growth. State domestic product represents the value of all goods and services produced within our geographic borders. From 2020 to 2023 Michigan was ranked 28th among the states, with a middling growth rate of 9%. Compare that to Florida, the fastest-growing state at nearly 20%, and our middling performance seems much worse.

This may not get better soon. The state has been adopting very counterproductive policies in recent years that may impact where we end up in economic indexes. Consider a few:

In 2021 the Legislature created the Strategic Outreach and Attraction Reserve fund, a subsidy program for corporations. Since January 2023 alone Michigan lawmakers have authorized $4.4 billion in targeted handouts. Mountains of scholarly evidence show corporate welfare programs to be ineffective and expensive. One large study of 2,400 subsidy deals across 35 states concluded that such subsidies have a “starkly negative” impact on employment at large establishments.

Against this backdrop, Lansing leadership fought hard last year to prevent Michigan citizens from receiving a previously scheduled across-the-board personal income tax cut amounting to just 0.20 percentage points. Research shows that lower personal taxes and a reasonable tax structure are likely job creators, and a factor in interstate migration. In 2010 the Mackinac Center found that for every 10% increase in personal tax differentials with other states, an additional 4,700 people leave Michigan.

Lawmakers also began calendar 2023 by repealing Michigan’s 10-year-old right-to-work law. This was a true economic development program. A great deal of academic and think tank research demonstrates that states with RTW laws do better on employment, income and population growth than states without them. The Mackinac Center itself looked at changes in manufacturing employment in counties with right-to-work protections and found significant gains where such laws existed.

Other bad policies our officials have adopted will raise the cost of living in Michigan. The Legislature reinstituted the state’s prevailing wage law, which will hike the cost of taxpayer funded projects. Even worse, Michigan enacted a net-zero carbon energy law that will raise energy costs for each household by as much as $2,750 per year. Other policies have been introduced to authorize a new payroll tax, impose a rent control mandate and create an occupational licensing regime for apartment managers.

Short of a major state policy about face, Michigan’s motto won’t be “If you seek a pleasant peninsula look about you.” It will be “if you seek a pleasant peninsula, move to Florida.”

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.