As Michigan’s gubernatorial election approaches, corporate welfare may be among the campaign issues. Both major party candidates have past voting records supporting the practice.

A 2013 video by former Gov. Jennifer Granholm sheds some light on how large a role business subsidies played in her administration’s economic policy. And the example Granholm cited in that video shows how ineffective state corporate welfare policy was for the city of Greenville, in what turned out to be a major test of the approach.

In the video, Granholm discussed state efforts to rescue Greenville when refrigerator manufacturer Electrolux announced it would transfer production to Mexico. The video was part of a presentation the former governor delivered in California, in which she talked about her "obsession" with creating jobs.

Granholm described getting a call from the head of the state’s economic development agency in 2003. “He said, ‘Gov, we have a really big problem,’” Granholm tells viewers.

The problem, Granholm said, was that a city with 8,000 residents was about to lose an employer that provided 2,700 jobs. With that many jobs in Greenville, Electrolux was the anchor company in the county.

While those had grabbed the attention of the state’s highest public official, at the same moment, hundreds of thousands of Michigan jobs were lost and gained with little notice by the government or media.

Compared to that ongoing statewide “job churn” –  Michigan jobs that are created or disappear each year – Greenville’s 2,700 jobs were but a tiny sliver, less than 1 percent.

In 2005, the year before the Electrolux plant closed, 1,011,118 private sector jobs disappeared in the state. In the same year, 994,229 new jobs were created. The total number of jobs in all sectors was about 4.3 million then.

Granholm said in the video that she, along with city and community leaders from education, business and labor, all met with Electrolux managers in an effort to convince them not to leave Michigan.

“We took out our chips, created a pile of incentives, and we slid our pile of chips across the table to the management of Electrolux,” Granholm said in the video.

She said the incentives included zero taxes for 20 years and government help in building a new factory.

Granholm said Electrolux turned down the offer.

In 2006, Granholm tried to bring a new industry into Greenville. Again, the effort involved narrowly targeting a specific firm or industry with economic incentives from state, county and city governments. The result was a $45 million tax incentive package for United Solar Ovonic, which would make thin-film solar cells in Greenville.

Granholm toured the company facility in Greenville in March 2008. According to the Detroit Free Press, it employed 185 people at the time. In 2009, MSNBC did a national segment on the solar panel company, saying it was resurrecting jobs in Greenville.

With its lucrative government incentives, United Solar Ovonic was projected to create 700 direct jobs and another 3,062 indirect jobs.

That never happened.

The company idled its plants in 2012 and filed for bankruptcy later that year.

When Electrolux left Greenville in 2006, Granholm described the consequences as catastrophic.

“In fact, it was like a nuclear bomb went off in that little community of Greenville,” Granholm said in the video.

But Montcalm County, where Greenville is located, has largely recovered.

The year Electrolux closed its plant, the personal income of Montcalm County residents was 75 percent of the state average. It fell to 68 percent in 2007 but has, since then has reached 72 percent.

In 2005, before Electrolux left, 26,895 Montcalm county residents were employed. That number dropped to 22,289 in 2009, but it was back up to 26,753 in 2017, according to the U.S. Bureau of Labor Statistics. Statewide, Michigan employment has gone from 4.389 million in 2005 to 3.863 million in 2010 and back up to 4.181 million in 2017.

The U.S. Department of Health and Human Services has signaled that it is considering a rule prohibiting states from deducting union dues from checks sent to home health aides employed by Medicaid beneficiaries. This in-home care is often provided by friends and relatives, who receive their checks from the state.

The practice of states classifying these aides as public employees and letting unions deduct dues from their checks, sometimes referred to as a “dues skim,” is currently allowed in 11 states.

The Olympia, Washington-based Freedom Foundation estimates that in 2017, about $150 million in union dues was skimmed from Medicaid checks.

In Michigan, the state allowed the Service Employees International Union to skim $34.4 million from Medicaid checks between November 2006 and May 2012. The practice officially ended in Michigan in April 2013.

At some point between 1992 and 2015, 15 states allowed unions to take a share of Medicaid money that was meant to pay health aides. This came about after unions “organized” those aides through processes that raised questions and were not transparent. In 14 states and three counties in California, it was done either through union votes that, on average, saw just 27 percent of targeted workers participate, or with a “card check” process. Under card check, workers are contacted one at a time by union associates and asked to sign a card indicating their support for forming a union and paying dues.

The Mackinac Center for Public Policy was the first organization in the country to challenge the legality of dues skimming. Michigan Capitol Confidential, which is published by the Mackinac Center, also published over 100 articles on the subject.

In April 2013, Gov. Rick Snyder signed a new state law declaring home health care workers to be private employees, not public ones, and thus not subject to unionization. That same month, the Michigan Department of Community Health ended a contract with the SEIU that had been established during the term of former Gov. Jennifer Granholm. With the end of the contract, dues skimming stopped.

In the 2014 U.S. Supreme Court ruling Harris v. Quinn, the court held that these Medicaid home health care providers are not state employees and so are not subject to unionization under federal labor law. But the ruling didn’t explicitly prohibit states from siphoning money from Medicaid checks to union coffers, usually the SEIU or the American Federation of State, County and Municipal Employees.

“The Mackinac Center’s leadership in ending the dues skim in Michigan set the stage for both the Supreme Court’s opinion in Harris v. Quinn and this proposed rule, which should once and for all prevent public employee unions from improperly taking money meant to assist some of our country’s most vulnerable citizens,” said Patrick Wright, who was the lead attorney on the Mackinac Center’s dues skim-related lawsuits and is the head of the Mackinac Center Legal Foundation.

The Mackinac Center for Public Policy has submitted a public comment to the U.S. Department of Health and Human Services, sharing its experiences opposing unions skimming money from Medicaid payments to those caring for sick friends and relatives.

“Michigan’s experience provides compelling insight into what happens when the rights of independent home care providers are deprived through compulsory or coerced union fees,” the Mackinac Center’s comment reads in part. “According to a report by the U.S. Department of Labor, SEIU Healthcare Michigan’s membership fell from 55,265 in 2012 to 10,918 in 2013, once mandatory payment of union fees was no longer a condition of employment.”