Why No Jobs?
- 10.06.2009 - 9:49 AMBoth the Washington Post and Michigan Governor Jennifer Granholm are stumped: the governor is trying so hard (tax credits, Super Bowl ticket giveaways, and more!) and there are so many government-directed programs to create jobs in Michigan, yet none of it is working. Remarkably, Michigan has lost 870,000 jobs, 632,000 during Granholm’s term. Its unemployment rate is the nation’s highest — 15.2 percent. But how can this be when state government is doing so much?
For starters, it is one of the more heavily unionized states around. The UAW did its number on the car industry, and any employer coming into the state will have a similar experience with Big Labor. Given the choice between a right-to-work Sun Belt state and a Big Labor–dominated Rust Belt one, most employers will (and do) choose the former. That reality doesn’t make it into the Post story, nor, I suspect, onto Granholm’s to-do list. Think for a moment (aside from the political impossibility of it) what would happen if the state passed a right-to-work law allowing employees to refuse to join a union. I’d imagine employers might take another look at Michigan.
But there is also another mega-factor: liberal spending and high taxes. Granholm and the Michigan legislature have run a mini-California — spending more than they could afford and raising taxes as they went. Granholm is reduced to concocting tax breaks and giveaways, but the state income tax has been going up. And she’s at it again – hawking hundreds of millions in new taxes, including hikes in business taxes.
The lesson to be learned: if your tax, spending, labor, and regulatory policies are anti-employer, you are going to lose jobs no matter how energetic and attractive your chief executive is. There’s a lesson there for the other 49 states.
| »Back to Contentions | »Back to Commentary |
