More Good News for Michigan

State climbs to 12th place in economic outlook rankings

Over the past decade, Mackinac Center for Public Policy analysts have pointed out that the Great Lake State ranked at the bottom of a number of economic measures and indicators.

In the last couple of years though, there has been far more good news to report than there used to be.

Last week, the American Legislative Exchange Council released the 7th edition of its "Rich States, Poor States" review. We have cited their findings before. According to ALEC, Michigan's "Economic Outlook" rank leapt from 20th to 12th in the space of a year. The authors point to passage of the state's right-to-work law as the driving force for that dramatic change.

Mackinac Center research shows that from 1947 through 2011 states with right-to-work laws experienced a 0.8 percentage point annual average increase in personal income, adjusted for inflation, compared to what those states would have experienced without such laws. That may sound small but consider: If the growth rate would have otherwise been 2 percent, and adding a right-to-work law made it 2.8 percent, then the rate of personal income growth leapt a whopping 40 percent.

In 2009, Michigan's rank on this index hit an all-time low of 34th before steadily climbing to 20th last year. The Economic Outlook rank is based on 15 variables including tax, labor and welfare policies.

This is not the only index in which Michigan has seen improvements. As one example the Tax Foundation has long ranked the business tax climates of each state. In 2014, Michigan was 14th best, up from 36th in just 2004. Our corporate tax ranking alone went from dead last to 9th best.

After a lost decade of good economic news, it is worth pointing to reasons for a Michigan comeback. Let's hope the momentum continues.