MEDC Untruths Reveal Political Nature of 'Jobs' Department

Last August, the Mackinac Center released a critical report, "Michigan Economic Development Corporation: A Review and Analysis," which found, among other things, that the Michigan Economic Growth Authority, the state's flagship jobs program, was so ineffective that every $1 million in MEGA tax credits awarded in a particular county was actually associated with a loss of 95 manufacturing jobs in that county.

This finding received extensive media coverage, which elicited two comments from MEDC officials that jumped out at this author as either misleading or erroneous.

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When reporter Christopher Behnan of the Livingston Daily Press & Argus asked an MEDC official about the study, this person claimed that a report showed the program had created "tens of thousands" of jobs and "generated more than $2.4 billion in state tax revenues..."

Only one problem. There was no "report." What this MEDC official was referring to was a collection of the forecasts which are ginned up for each MEGA deal when it is arranged.

The second example appeared in the Crain's Detroit Business coverage, which included the following: "Bridget Beckman, public information officer, said while projected job counts in the time frame studied by the center may have been related to manufacturing, that's an industry that 'has changed significantly...'"

Beckman either did not read the study or ignored the fact that it controlled for "changes in local employment figures [that] may be influenced by trends in the surrounding region." In other words, using the standard statistical techniques of economic analysis that should be well understood by officials of a government "economic growth" entity, the study "canceled out" these larger changes to isolate the precise impact of the MEGA program on manufacturing jobs.

These complaints are not just sour grapes. The incidents are just two in a pattern of dubious claims from the MEDC. Although the agency poses as an economic development one, its real mission is in fact political development, and so its pronouncements should be viewed with the same skepticism as ones from politicians.

Like a politician with a dodgy record, this agency has fought for its political life in the past, is doing so today, and will likely fight even harder during the coming gubernatorial campaign. The Legislature, public and press should not take its job creation claims at face value.