Rearranging Economic Development Agencies in Michigan Is an Old Idea

Published December 30, 2014

As if to prove there is nothing new under the public policy sun, Michigan Gov. Rick Snyder in December 2014 announced a government reorganization marrying the state’s existing “economic growth and job training efforts under one department.” 

They’ve been married before, however, and it didn’t work well. In fact, corporate welfare doesn’t work at all, and no amount of reorganizing will make it so.

Michigan had a similar system during the 1990s, when economic development efforts and job training efforts were both run out of the Michigan Jobs Commission. Gov, John Engler (R) split “job and talent training” from “economic development” in 1999, because he believed thought the split would improve the state’s economic development efforts.

Same Old, Same Old

Under Engler’s approach, the Michigan Economic Development Corporation (MEDC) was supposed to concentrate on economic development efforts, while a separate Michigan Department of Career Development handled workforce development.

In a 1999 Michigan Information & Research Service report, MEDC President and CEO Doug Rothwell, said, “the state’s economy [had] grown to the point where the Michigan Jobs Commission model didn’t fit anymore.” 

It’s difficult not to be cynical about moves made within the state’s corporate welfare complex, because so much of it just ends up being the same old musty wine in a new skin.

If It Was Working, Why Fix It?

According to Snyder, “One of my top priorities has been to make Michigan a national leader in talent development by focusing on workforce training for the jobs of today and tomorrow.

“That effort will require a comprehensive, unified approach to best help Michiganders while working to retain and attract businesses to create more and better jobs.”

Why is a comprehensive, unified approach necessary today when it apparently didn’t work in the past?

At the December 18, 2014 press conference, reporter Tim Skubick asked, “So the old system was not working?”

The governor responded, “It was working.” As proof, Snyder cited the state had “passed the 300,000 private sector job mark now,” creating new jobs filling job positions.

Reorganizing the agencies again “is a way to accelerate that,” the governor concluded.

Snyder said job creation would be an issue gaining more attention nationally, as governments focused on ensuring that citizens were trained with the “requisite skills to be successful in the careers that are going to be the careers of the future.”

Private Sector Alternative

It doesn’t matter how often state government moves its seating chart around. Taking money from many businesses and people and giving it to just a few isn’t a recipe for economic growth, and the empirical evidence is pretty clear on that.

Many of the job training goals laid out by government should be reached privately. After all, if companies and people were allowed to keep more of what they earn, they could tailor their own needs and desires and revenue to fit the demands of the marketplace.

Michael D. LaFaive ([email protected]) is director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy. An earlier version of this story appeared at the Mackinac Center for Public Policy’s website at Reprinted with permission.