LANSING, Mich. (Michigan News Source) – Outgoing President Joe Biden’s multi-billion-dollar CHIPS Act was supposed to unleash a job boom – but it’s looking more like a sprinkle than a storm. With more than $30 billion funneled into semiconductor companies and headlines boasting about 115,000 jobs, reality is hitting hard.
An analysis done by James M. Hohman, Director of Fiscal Policy at the Mackinac Center for Public Policy called “Front Page Failure” reveals that the promises of taxpayer subsidized job creation are rarely realized. In his analysis, he looked at 20 years of stories from the Detroit Free Press, saying, “Front page news stories in Michigan’s largest newspaper from 2000 to 2020 announced the creation of a total of 123,060 new jobs. State reports show these deals created just 10,889 jobs in the end, a success rate of just 9%. Only one in 11 of the announced jobs in these front page stories ever came to fruition.”
Michigan’s job mirage – decades of broken promises.
From Webvan to Waymo, Michigan has been the poster child for corporate welfare misfires. Politicians have promised taxpayers the moon, but what they got was a few rocks. Remember IBM’s 1,500-job pledge in 2009? Zero delivered. And the nonexistent online grocery story Webvan said it would employ 900 people but also delivered zero – after getting $23.4 million in tax credits.
Taxpayer dollars, political profits.
What about all of those non-disclosure agreements Michigan politicians signed, allowing lawmakers and economic development corporations to secretly plan EV-related “megasites” like Gotion and the Eagle Megasite?
For months, and sometimes years, these deals were shrouded in secrecy so that communities where these megasites were to be built were behind the eight-ball trying to stop them. The justification from developers and the government as to why they were handing out millions in taxpayer dollars for these developments? The same old refrain: jobs, jobs, jobs.
Another stark example of the “job creation” mirage comes from Samsung’s EV battery headquarters in Auburn Hills, Michigan, which recently announced plans to lay off nearly 200 workers – despite having received state subsidies through the Michigan Economic Development Corporation (MEDC).
Corporate welfare: flashy promises, fading results.
The conclusion of the Mackinac Center report: corporate welfare isn’t about creating jobs; it’s about creating optics. Promises of “good-paying jobs” make for great headlines, but accountability? That’s someone else’s problem. Meanwhile, Michigan taxpayers are left holding the bill for a bad bet.
Hohman says in the report, “People should know that the stories about government subsidy programs that make it into the news rarely work out as planned. Reporters who cover these economic development deals should recognize that the certainty that their sources portray about these deals is an illusion.”
MORE NEWS: New Toll Rates for Detroit Windsor Tunnel
Hohman goes on to say, “Some of the state’s assistance programs do not require companies to do anything they weren’t already planning to do. In other words, state deals can result in extra taxpayer expense but no extra job creation beyond what would have happened anyway. Companies can and do create jobs in Michigan without any assistance from the state or elected officials. Michigan added 207,857 private sector jobs in the first quarter of 2024, the most recent data available from the Bureau of Labor Statistics. The state also lost 198,797 private sector jobs over the period.”
Hohman continued, “The Michigan Economic Development Corporation, the state’s administrator of its business subsidy programs, issued press releases announcing that the businesses receiving state deals would create 4,863 jobs over that same period. Even if all those jobs were created, those deals would have increased the number of jobs created in the state in that quarter by about 2.3%. These subsidy deals are simply too meagre to impact statewide job trends.”
What is Michigan’s track record?
According to the analysis, Michigan’s track record for turning job announcements into actual results is nothing short of abysmal and Michigan residents have endured two decades of empty promises.
About the promises of jobs, Hohman says, “The claims made in these stories are also incontrovertible; they cannot be denied or refuted at the time they are made. A company spokesman says that the company will create jobs. The pledges about what the company will do in the future cannot be fact-checked as they involve something that has not yet occurred. Unless the company involved in a deal does something illegal that warrants further attention – which happens on occasion – there is nothing in the story that can be contradicted.”
From Lansing to Washington: a legacy of empty promises.
Michigan’s struggles with corporate welfare serve as a cautionary tale for the nation. As Michigan taxpayers bear the brunt of broken promises from Governor Whitmer and economic development agencies, Biden and the Democrats’ grandiose claims of a semiconductor boom strikes the same familiar chord: flashy headlines for political gain, but little to show for it.
The state’s 9% success rate for job creation deals should be a wake-up call for every taxpayer funding these kinds of political gambles. Michigan deserves better, and so does America. If leaders in Lansing and D.C. continue to prioritize optics and political ideology over outcomes for American citizens, the cycle of wasted taxpayer dollars and ghosted jobs will continue to haunt future generations.
Leave a Comment
COMMENTS POLICY: We have no tolerance for messages of violence, racism, vulgarity, obscenity or other such discourteous behavior. Thank you for contributing to a respectful and useful online dialogue.