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Reitz: Job announcements are not actual jobs

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3 months ago

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Reitz: Job announcements are not actual jobs

Michael Reitz
 |  The Detroit News

Imagine if Detroit Lions head coach Dan Campbell announced today that the Lions will win the 2025 Super Bowl.

Imagine this announcement comes today, before the season starts and before a single play has been run. More than mere bravado, the team orders their Super Bowl rings and hang a victory banner in Ford Field. Players don their championship hats. The parade is scheduled for tomorrow.

Fans would be skeptical. We understand the difference between good intentions and actual outcomes. 

Political leaders perform this charade over and over.

Gov. Gretchen Whitmer is calling for the Legislature to pass a multi-billion-dollar program so the state can shower favored corporations with incentives. This comes on top of the $4.4 billion Michigan has approved for incentives since January 2023.

Last week, a House committee approved a new program and Whitmer sent out a triumphant press statement.

“Since I took office,” she said, “we have announced 38,000 new auto jobs and driven unemployment to historic lows.”

Notice the verb she used: “announced.” Schedule the Super Bowl parade!

The reality, according to the Bureau of Labor Statistics, is that Michigan lost 3,500 auto and auto parts manufacturing jobs since Whitmer took office.

Michigan has a long and embarrassing record of granting billions of dollars to companies with little to show for it. The state hands out money, enticing companies to relocate or stay here. Business leaders and politicians announce how many jobs will be created. The news features photo ops with hardhats, shovels and ribbon-cutting ceremonies. 

The reality almost never matches the hype. The Michigan Economic Growth Authority, the state’s much-celebrated economic development program, offered incentives for 434 projects from 2005 to 2011. These projects were intended to create new jobs, but the Mackinac Center discovered that only 2.3% of the projects met or exceeded their jobs goals. 

Bridge Michigan recently analyzed the $1 billion Michigan spent subsidizing electric vehicle and battery plants. Most projects have been delayed or downsized, the analysis found, producing a paltry 200 jobs. 

The state also spent $500 million subsidizing the film industry from 2008 to 2015. The result was a small uptick in jobs. The sugar high didn’t last; the job numbers fell back down after the state pulled the plug on the program.

We can point to dozens of examples with the same pattern. State lawmakers make front page news when they announce subsidies to private companies. They don’t get front page accountability when results fail to materialize.

Job announcements are not jobs, but they sure are expensive for taxpayers.

A final point: While this is a bipartisan problem — both Republicans and Democrats champion business subsidies — it is curious to see lawmakers whose votes contradict their campaign rhetoric. Take Democratic Rep. Betsy Coffia of Traverse City.

Coffia often criticizes companies and the profits they make. While campaigning, Coffia tweeted: “We need leaders who staunchly believe People = more important than big corps record profits. And act accordingly.”

Coffia serves on the committee that Whitmer applauded last week, and she voted for the $2.5 billion in new subsidies. Her 100% rating on the Mackinac Center’s Business Subsidy Scorecard shows she has voted for every subsidy that’s come before her. 

Lions fans may well have reason to celebrate next season, but the victory will first be earned on the field. Similarly, our elected leaders should shift away from grandiose promises to policies that actually deliver economic results. 

Michael J. Reitz is executive vice president of the Mackinac Center for Public Policy.

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