News Story

State Government Has Poor Record Predicting Jobs

State government agencies have a long history of making bad decisions about which companies should get select tax breaks from Michigan.

But that hasn't stopped them from making extravagant job predictions. That was routine during the eight years Jennifer Granholm was governor. And some still want to know how many jobs specific policies will create.

MLive political commentator Tim Skubick chastised Gov. Snyder recently for not giving an estimate on how many jobs the right-to-work law would create in Michigan.

In February 2012, Skubick also criticized Gov. Snyder for not predicting how many jobs would be created by the governor's tax cuts.

Skubick's criticisms come despite the repeated failure of governments to accurately predict actual job creation numbers and the outright falsity of government claims of "jobs saved" or "jobs announced." 

Those announcements rarely pan out. More than 600,000 jobs left Michigan during Granholm's eight years in office.

Michigan has done well under Gov. Snyder. While it hasn’t generated a lot of media attention, University of Michigan Economist Don Grimes found the state had remarkable job creation in the private industry in 2011. 

Grimes found that in 2011, Michigan ranked second in the nation in terms of private-sector job gains behind North Dakota. Michigan had 32,528 job gains due to the "competitive effect," which is the difference in employment growth for a specific industry between a local area and the national average. Grimes said it was a great improvement from the 2001 to 2009 period when Michigan was at the bottom of states in terms of "competitive" employment gains.

Grimes broke down Michigan employment data and compared it to national trends at a detailed industry level. The analysis drilled down to the specifics of the industry using the North American Industry Classification System at the six-digit level. For example, it wasn't just food manufacturing, but the kind of food such as cookie and cracker manufacturing or cheese manufacturing that was analyzed. Grimes said the factors that influence the competitive effect are much broader than public policy, but public policy plays a factor.

"Job providers don't ask for state approval to add jobs, nor do they report to state bureaucrats about why they change their staffing levels," said James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy. "But state policy influences those decisions regardless. Snyder should be commended for improving the rules that influence broad sectors of the economy."

The state's accuracy for predicting job creation has been questioned in the past.

A report from Michigan's Auditor General found that just 28 percent of the new jobs the Michigan Economic Development Corp. projected actually came to fruition.

And the legislature is currently debating a bill extending the 21st Century Jobs Fund which made dozens of specific promises about job numbers that did not come to be.

MIRS News reported that under under Gov.Granholm's tenure, her administration reported that the MEDC claimed to have created 1.4 million jobs, or 29 percent of the state's entire labor force. That was being reported at the time Michigan led the country with the highest unemployment rate.

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.

News Story

At Least 54 School Districts Have Contracts Dodging Michigan's Right-to-Work Law

Fifty-four and still counting. That's how many public school districts are known to have signed contracts that dodge the new right-to-work law.

Michigan's law was passed and signed in December and freed workers from having to pay union dues or fees as a condition of employment.

However, the law didn't take effect until March 28, which created a window for unions to work with public school administrators to lock members into long-term contracts. If school districts agreed to new contracts before March 28, teachers and other affected employees are forced to keep paying the union for the life of the contract. Several new contract agreements were for two or three years while others were signed for up to 10 years.

"If a contract was likely to have been agreed to regardless of the right-to-work law, it is not included in our count," said Michael Van Beek, director of education policy at the Mackinac Center for Public Policy. "Some of the districts did more than one contract, but we're still only counting them once. Our count does include ISDs (intermediate school districts).

"Some of the contracts just involved support staff," Van Beek added. "But the vast majority covered teachers. At this point I think it's safe to say that close to 20 percent of the teachers in Michigan have been affected."

Van Beek emphasized that the count is not complete. He said that the Mackinac Center is using the Freedom of Information Act to help compile its list.

House Speaker Jase Bolger, R- Marshall, said the issue he and his colleagues are concerned about is accountability.

"Right-to-work and contract negotiations have several things in common, including the fact that neither should be about partisan politics and both should focus on how taxpayers, students, and workers will benefit," Rep. Bolger said. "There have been no threats, and there is no discussion of any retaliation for schools that chose to open contracts or negotiate long-term deals.

"There is, however, a focus on accountability to taxpayers, students and teachers," he said. "Therefore, the state budget in the House will seek to continue that focus and our discussion will be about how we should hold schools accountable for their responsibilities to their customers. Local schools had every right to negotiate the contracts as they wish, just like the Legislature has every right to seek accountability for taxpayers in the budgets we pass."

Of the 54 known right-to-work-dodging agreements, the one in Taylor has raised many flags and prompted three teachers to file a lawsuit against their union and the school district. The Taylor Federation of Teachers collective bargaining agreement was for four years, but a separate agreement locked its teachers into paying dues and fees for the next 10 years. The Mackinac Center Legal Foundation is representing Angela Steffke, Nancy Rhatigan and Rebecca Metz over that arrangement.

The following is a list of the school districts that have signed agreements avoiding the right-to-work law.

Alcona, Ann Arbor, Avondale, Belding, Berrian Springs, Bridgeman, Chippewa Hills, Clarkston, Coldwater, Columbia, Dearborn Heights, Detroit Public Schools, Dexter, East China, Escanaba, Gegebic-Ontonogon ISD, Grand Rapids, Grandville, Greenville, Grosse Pointe, Hartland, Hastings, Holton, Homer, Holly, Hudson Valley, Hudson Area, Ida School District, Kalamazoo, Kaleva Norman Dickson, L'Anse, Lansing, Linden, Madison, Marquette Alger RESA, Midland, Millington, Mt. Clemens, Parchment, Pinkney, Romeo, Royal Oak, Saginaw Public, Southgate, South Lyon, South Redford, Taylor, Utica, Van Dyke, Wakefield–Mareniso, Warren Consolidated, Warren Woods, Waverly, and Wyoming.

Michigan Education Association spokesman Doug Pratt did not respond to a request for comment.

Editor's note: This story has been edited since its original publication. Escanaba has been added to the list and Zeeland has been removed. Zeeland completed its contract after the right-to-work deadline.

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.