There are a lot of ways to measure economic freedom. The fancy suits love to use indexes that look at lots of variables to figure out what causes produce which results. One of the most often used is the Fraser index out of Canada. It’s been used as a primary source for years by scholars, economists, and researchers all over.
The Mackinac Center for Public Policy is a nonprofit research and educational organization that supports free markets and limited government. It recently put out a piece based on Fraser’s data warning Michiganders of some problems in the state’s current policies. Agree or not, it’s worth consideration!
Here are Five Fast Facts about Michigan’s economic underperformance:
- 🔍 The Rating - The Fraser index rated Michigan’s economy at 31st in the nation. While not terrible, it’s certainly not what we want it to be! Generally speaking, places with the least economic freedom have average income of more than 2% below the national average. Places with more economic freedom have average income of almost 4% above the national average.
- 💰 Recovery…ish - Most states recovered all the jobs lost during the pandemic pretty quickly, but Michigan only did so last year. Today, the number of total jobs in the state is only 0.5% more than pre-pandemic. The national average is several times higher at 3.6%.
- 😯 Subsidize This (Or Not) - One measure of economic health is the state’s gross domestic product - all goods and services produced within the state’s borders. We came in at 28th, which is okay. But our growth rate of 9% pales in comparison to the top state, Florida, at 20% growth. That’s partly because our lawmakers have authorized over $4 billion in government handouts just since January 2023, and studies show that such subsidies have a huge negative impact.
- 😣 It’s Personal - Research suggests that a reasonable tax structure and low personal tax rates allow for more job creation, and that impacts population migration from state to state. As we already know, one of Michigan’s big problems is population loss. For every 10% increase in personal tax (compared to other states), almost 5,000 people leave the state. Just last year, Michigan’s lawmakers rejected even a small tax cut.
- 😥 Questionable Lawmaking - Speaking of lawmakers, they seem to be doing everything they can to write laws and policies that hurt the state’s economy. This includes repealing the Right To Work law (which has been shown in other states to improve jobs, income, and population growth), instituting a prevailing wage law, and enacting strict energy restriction laws that will cost the average household almost $3000 per year more.
🔥Bottom line: At the end of the day, we all just want to be able to take care of ourselves and our families. Sure, a lot of that is up to us on things like our education, willingness to work hard, and so on. But the legal and policy environment where we live can have a huge impact on everything. This analysis on Michigan’s economic landscape is pretty sobering, and it appears we have some decisions to make in the next election.
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