Analysis: Agriculture Still Not the Second-Largest Industry in Michigan
Sen. Stabenow, chairing Senate Agricultural committee does not know this
It’s distressing that the Michigan Senator chairing the U.S. Senate Agricultural committee doesn’t know that, despite rumors, Michigan’s agriculture does not represent the state’s second-largest industry.
In a recent press release on proposed assistance to agricultural industries, Sen. Debbie Stabenow’s office claimed: “Bio-based manufacturing is a key sector of Michigan's agriculture industry, which is Michigan's second largest industry, supporting nearly one out of every four jobs.”
But these statistics being used by the Democrat from Lansing are a hypothetical guess using an inflated definition of agriculture and a multiplier factor.
According to the Bureau of Economic Analysis, there are 63,667 jobs in farming — or one out of 79 jobs. The industry produces 0.9 percent of the state’s earnings. These relatively small figures are nothing to thumb your nose at, but they’re far from the inflated figures used by the senator.
The source for the oft-repeated "second-largest industry" seems to come from an MSU report that uses a very loose definition of agriculture and multiplies the economic impacts from that loose definition.
For instance, cereal factories are included and as are food wholesalers and retailers like grocery stores and restaurants, regardless of their sales of Michigan-grown produce. These jobs are then multiplied for their ancillary effects, meaning that you could be working as a car salesman and still be "induced" by agriculture, even though you directly work in automotive retail.
This makes the multiplier unfair for comparisons. Every industry in the state is connected to each other and some industries are more connected than others. Dropping a dollar on any product produces an echo someplace else.
Regardless of its size, agriculture plays an important role in the state economy. But politicians should not seek to inflate the impacts of the industry when supporting selective favors.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
Schools Aren't a 'Jobs Program'
School districts sometimes are referred to as a "local educational agency," but recently the one in Fruitport seemed more concerned with being a "local employment agency."
MLive.com reports that the school board voted against saving $240,000 by contracting out for custodial services — money that could be redirected toward educating students. The president of the janitor’s local union said board members, "felt that people shouldn't lose their jobs right now" and, according to MLive.com, specifically praised those on the board who have "ties to labor."
There are two misconceptions in this remark. First, contracting out does not automatically mean current employees will lose their jobs. In fact, districts can require the company they contract with to hire back the district's employees (or at least give them first right of refusal).
Second, and more importantly, school districts are not a government "jobs program." They are charged with providing the best possible education to students at the lowest possible cost to taxpayers. Period. End of story.
Perhaps the Fruitport school board believes that having unionized custodians directly on its payroll helps students learn better. If so, let them make a case for it. Absent that dubious proposition, if this union boss is correct about why the school board turned down these cost savings, its members are neglecting the district's real mission.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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