While Michigan lawmakers have green-lit billions in subsidies over the past quarter of a century, they haven’t helped the state stop bleeding auto industry jobs, a new analysis revealed.
According to the Mackinac Center for Public Policy, of the 315,000 auto and auto parts manufacturing jobs the Wolverine State boasted in 2000, it has lost 145,600 since then. That comes as state lawmakers have authorized $22.7 billion in business incentives over the same period.
The state appears to be headed for even fewer auto jobs as General Motors announced it would lay off another 1,000 workers, mostly at its Global Tech Center in Warren.
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“There are still some manufacturing-sensitive policies lawmakers could pursue that would help,” MCPP Director of Fiscal Policy James Hohman wrote in a blog. “They can regulate electricity providers to prioritize cost and reliability rather than carbon emissions reductions. They can allow businesses to expense the costs of their equipment against their taxes. And lawmakers can again allow people to work for manufacturers without having to pay unions as a condition of employment.”
Hohman added: “Concentrated cash to select employers is a terrible strategy for job creation,” the Mackinac Center added in its analysis. “Michigan showered the automakers with taxpayer cash, and we have a little more than half the auto jobs we had before. Lawmakers should stick to the basics.”
According to MichAuto, a statewide auto cluster association, vehicle production in September in Michigan accounted for 20.2% of the nation’s total vehicle production. The state’s vehicle production in September was 5.3% lower than in August and 12.7% higher than in September 2023.
The industry’s importance to the state has led politicians like Democratic Gov. Gretchen Whitmer to try and take credit for an imagined uptick in auto jobs.
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“Since I took office, Michigan has added more than 25,000 auto jobs,” Whitmer tried to claim in a June 2, 2022, tweet.
However, even left-leaning PolitiFact would have none of it, saying the governor’s claim was “mostly false.” It concluded that between January 2019, when Whitmer took office, and May 2022, the number of auto jobs in the state was “slightly lower.”
Further, in February, CNN, citing Bureau of Labor Statistics figures, reported that jobs in Michigan’s “plants, parts factories and corporate offices shrank by 35% since 1990.”
“And those jobs make up only 3.7% of the jobs in the state, roughly half what it was in 1990,” the network reported. “Today, more than four times as many workers in Michigan have jobs at one of the state’s hospitals than at an auto assembly plant.”
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Meanwhile, a package of bills pending before state lawmakers would rename the state’s economic development initiative. The bills, introduced more than a year ago, could have new life in a lame-duck legislative session where Democrats are pushing through a slate of measures before they lose their trifecta control in Lansing.
House Bills 5104 and 5106 would replace the Strategic Outreach and Attraction Reserve with the “Make it in Michigan” Fund. Several other related measures — House Bills 5095, 5105 and 5107 — would make additional changes to reflect the update.
One change that has drawn criticism is a provision that the to-be-expanded Michigan Strategic Fund consider and document several criteria before entering into a written agreement for a qualified investment under the Michigan 360 program.
The criteria include assessing whether a proposed eligible activity supports the federal Justice40 initiative President Joe Biden created via Executive Order. The order mandates that 40% of select federal spending, such as “clean energy” and “sustainable housing,” benefit “disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.”
“This language lacks clarity and definition and inappropriately seeks to make subjective value judgments about the types of businesses worthy of consideration, which could close the door to projects from the start,” the Michigan Chamber of Commerce previously stated.