Michigan's $23 billion in subsidies fail to create jobs

In Michigan, a study conducted by the Mackinac Center for Public Policy has drawn attention to the failure of large, publicly subsidized industrial development projects in generating new jobs. Over a period of 20 years, the State of Michigan has approved approximately $23 billion in subsidies and tax incentives aimed at promoting job creation. However, findings show that a mere 9 percent of the expected new jobs actually came to fruition, demonstrating the ineffectiveness of these initiatives. The study revealed that out of the promised new jobs, only 10,889 materialized, with many projects resulting in no job creation whatsoever. The report suggests that these initiatives often lead to a phenomenon referred to as 'job churn,' where job gains in some businesses are offset by job losses in others. In the first quarter of 2024 alone, the Bureau of Labor Statistics reported that Michigan added 207,857 private sector jobs while simultaneously losing 198,797 jobs. This indicates that the net effect of job subsidies may not necessarily be an increase in overall employment within the state. Moreover, many companies that received state assistance failed to meet their job creation promises. The study reported that of the 14 companies that were supposed to generate significant employment, several created few positions or terminated jobs soon after receiving government support. Importantly, the investigation highlighted the perception that these subsidies distort the competitive landscape, often benefiting select companies while potentially harming others. Critics argue that rather than creating new opportunities, these deals may merely shift jobs among businesses, contributing to further job reductions. Given this context, public skepticism regarding the efficacy of Michigan’s job creation programs has grown. Although state lawmakers have invested significant funds over the years, the results indicate a worrying trend: that handouts to select corporations are not resultant in substantial job growth. The Mackinac Center’s study reflects a critical moment for policymakers to reassess the strategies and effectiveness of tax incentives and subsidies in fostering genuine economic recovery and sustainable employment for Michigan residents.