It has been two years since Michigan's film subsidy program became law, which is sufficient for it to have gotten off the ground and had some measureable impact on the state's economy.

According to the most recent Bureau of Labor Statistics, as of September 2009 (the most recent month available*), there were fewer people employed by the film industry in Michigan than before the subsidy program began.

The film subsidy program was signed into law on April 7, 2008. In that month there were 5,867 jobs in Michigan's "motion picture and sound recording industries," the industrial classification that most closely fits the target industry for the program. By last September these jobs had fallen to 5,290, a 9.8 percent decline.

While the program's impact on the overall state economy is too small to measure, its effects on taxes and the budget are significant. The state has authorized $117 million in film credits, and the Department of Treasury estimates that the subsidies will cost $155 million in the current fiscal year. This is equivalent to 7 percent of what the entire Michigan Business Tax currently extracts from businesses.

Film incentive supporters often point to particular jobs generated by the program's subsidies as evidence that it has been a success. In contrast, economic statistics are meant to summarize what has actually happened statewide, not merely assemble collections of anecdotes. While the film incentive program has succeeded at making this very small piece of the state's economy more visible, the actual data shows that it has failed even to increase the overall number of film jobs in the state, let alone provide a source of growth for any other industry.

*The BLS does have a survey that releases monthly job figures with only a one-month lag, but the information raises privacy concerns when there are few firms and little employment. Despite having the most generous film incentive program in the country, Michigan's film industry still doesn't have enough companies and jobs to qualify for disclosure via this survey.

The original version of this story was posted online on April 21, 2010. 

One of the entry-level jobs at the city of Ann Arbor's waste transfer station entails separating glass bottles from aluminum as they come down a conveyor belt.

For that job, FCR, the company that manages the waste station, usually pays the minimum wage of $7.40 an hour.

But because the city of Ann Arbor passed a "living wage" ordinance, those sorters make $13.06 an hour this year. Thanks to a deal struck with the city council, the city reimburses FCR so that it can pay the higher "living wage."

But a recent Michigan Supreme Court decision may invalidate such arrangements, as cities no longer have the authority to mandate wages with contractors they hire, says Paul Kersey, director of labor policy at the Mackinac Center for Public Policy.

Last September, the Michigan Court of Appeals found that Detroit's living wage ordinance was invalid under state law, upholding a 1923 decision, Lennane v. Detroit. Earlier this month, the Michigan Supreme Court decided by a 6-1 vote not to hear an appeal on the Court of Appeals' decision.

Kersey said that leads him to believe the living wage ordinances are invalid in the dozen-or-so communities that have them.

City of Ann Arbor city attorney Stephen Postema said his office is looking into the matter.

Kersey said someone will have to file suit in each of the communities to invalidate the ordinances.

"The next step is for an individual or a company in Ann Arbor who is affected by this legislation to file suit to have the law set aside," Kersey said.

In Ann Arbor, the living wage is $11.71 per hour if the company provides insurance and $13.06 an hour if no insurance is provided. Companies with fewer than five employees and nonprofits with fewer than 10 employees are exempt.

The original version of this story was posted online on April 29, 2010.