It seems like the news in Michigan includes almost daily celebrations of politicians promising new jobs just around the corner. It’s been that way for years. If that’s the case, though, wouldn’t we eventually run out of people to fill those jobs? Last we checked, there are still thousands of people looking for jobs, so what gives? Are politicians wrong, or just blowing smoke?
Here are Five Fast Facts on real talk about government subsidies and jobs:
- 🤦 Overpromise and Underdeliver - Between 2000 and 2020, Michigan lawmakers announced deals promising a whopping 123k jobs from corporate subsidies. Buuuuuut…less than 11k of those jobs actually materialized, for a success rate of a super lame 9%. Even weathermen chuckle about how bad that is.
- 🤐 Shhhhh… - While politicians are quick to brag about deals promising jobs, you never hear about it when these deals fall through (which is almost all the time). This selective silence misleads voters about the true effectiveness of business subsidies. It’s probably just an oversight, right? Over and over and over and over…
- 📣 Economic Development (i.e. Political Theater) - Despite such poor results, lawmakers continue to champion these programs, probably because it makes them look like they're "doing something" about jobs. Never mind that “something” is, in fact, nothing. But you should keep voting for them, anyway!
- 🤔 A Different Strategy - Other states, like Idaho, focus on broad-based economic policies rather than selective subsidies. Funny thing: these states see more robust job growth! So creating a good climate for businesses works better than the government picking and choosing winners and losers? No way!
- 🧮 The Professionals - Economists use complex formulas and fancy theories to examine the effect of economic development programs. There are occasional wins, but a lot more losses, and rarely anything that makes a big difference at all. But facts rarely get in the way of a good story about “creating jobs!”
🔥Bottom line: The bottom line is that we need to be a little more skeptical about job announcements when they come from the government. If we genuinely want improvements in our economy, we should focus the things that are proven to actually work: broad economic improvements that benefit everyone, like lower taxes, less regulation, and reliable infrastructure. Let the winners and losers sort themselves out without direct intervention from the government.
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