Wishful Reporting of Governor’s Investment Missions

In Gov. Jennifer Granholm's weekly radio address, she ballyhoos her investment missions abroad by claiming that they're responsible for creating or retaining 20,000 Michigan jobs. Unfortunately, she continues to mistake job announcements for job creation.

Michigan's record for converting announced jobs to real jobs is poor. Out of every 100 jobs announced by the MEDC, only 29 materialize. And beyond that, the governor's figure may include an estimate about the number of jobs indirectly created by the firms, making the figures difficult to verify.

And even then, these projects are not generated by the Governor simply pitching foreign companies on the business climate in Michigan, though some of that might occur, but by promising taxpayer incentives. For instance, the LG Chem plant the governor cites was awarded $100 million in refundable credits. Offering these taxpayer dollars can cost the economy jobs, too, and are not covered by the governor's estimates.

Indeed, there have been three recent studies that looked at the state's primary economic incentive program. When attempting to account for its total economic costs and benefits, two found the program negative and the other only slightly positive for the state.

Details on a number of these deals can be found at the Mackinac Center's MEGA Transparency Project.

Gov.-elect Rick Snyder campaigned on a results-oriented approach to governance. If he's serious about that, he will abstain from trumpeting the jobs announcements that the current administration relishes.

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