In a state where the unemployment rate has dived to 3.9 percent, where the primary manufacturing sector, the auto industry, has succeeded remarkably well, and where relatively low tax rates prevail, does it make sense that the 2018 Michigan gubernatorial election could be based on jobs and taxes?
Or, should the campaign focus on more clued-in policy proposals such as apprenticeships, “ALICE” jobs and lowering excessively expensive college degree programs?
Republican Attorney General Bill Schuette, who deserves the label of overall favorite for our next governor, announced his candidacy last week and immediately engaged in the GOP mantra of tax cuts as a means to solve all of our ills. Tax cuts are a sure-fire winner on the campaign trail, but mounds of evidence indicate that their impact on economic growth is mostly exaggerated.
As the corporate world would say, tax cuts for companies and individuals suffer from a lack of ROI – return on investment.
By way of textbook economics, the huge $1.8 billion corporate tax reduction successfully pushed by Gov. Rick Snyder in 2011 should have resulted in substantial economic growth. But evidence that the tax cuts, or the right-to-work law, have made Michigan a prime destination for corporate America is pretty thin. Michigan now ranks 33rd among all states with a corporate tax that amounts to just $119 annually on a per-capita basis.
Contrary to old-school visions of past decades, workplace technology, automation and robotics are emerging as the overwhelming factor in the 21st Century economy. What’s lost on all the political partisans and the Libertarian types who focus the next election win is that Michigan is headed for a bipolar, discombobulated economy.
The percentage of college graduates in this state who are ready for a high-tech STEM (Science, Technology, Engineering and Math) career remains way, way below the 50 percent mark. At the same time, depleted tax revenues leave higher education state funding stuck at the 2010-11 mark. That means prohibitive university tuition rates and exorbitant payments on college loans.
Beyond the brain-drain that sends Michigan college graduates scurrying to find out-of-state jobs, especially among those completing degrees at rural area colleges, high school standardized test show that a disturbingly low level of students are prepared for a college curriculum. The latest scores among 11th graders shows that just 37 percent of these high school juniors are “college-ready” in math.
At the other end of the economic spectrum, we have a huge contingent of young workers with no more than a high school diploma toiling in the hotel, restaurant and retail industry. A recent Washington Post article found that half the jobs in America now pay less than $18 an hour. In Michigan, that description especially applies to the Up North area of the upper and northern-lower peninsulas.
According to the advocacy group Business Leaders for Michigan, by 2020 roughly 70 percent of the state’s available jobs will require college education. Meanwhile, 40 percent of the adult population currently lies within the category of high school graduate or less.
Yet, there remains a middle ground between college graduates attaining 21st Century careers and the working class struggling to pay their bills. That’s where the “training gap” enters the picture.
Snyder and the skilled-trades unions who build our highways, homes, factories and office buildings have tried to spread the word that tens of thousands of good-paying construction-related jobs are available. Job training is the key but in a state where union labor serves as Michigan’s heritage at its best, the results are still minimal.
State rankings for apprenticeship programs leave Michigan out of the Top 10 for these highly successful job programs in areas such as carpenters, electricians, pipe-fitters, welders, roofers and plumbers.
What’s more, Michigan has one of its lowest jobless rates ever but it suffers from a lack of good-paying jobs.
Bridge Magazine has revealed the state’s floundering workforce in great detail, explaining that high disability rates, an epidemic of opioid addictions, and a growing number of mostly white men who are not seeking work have created a downtrodden economic situation where growing prosperity remains largely out of reach.
Lou Glazer, the guru of predicting future Michigan job markets, wrote in a blog today that the consequence of way too many lower-paid jobs — as well as too many working in part-time jobs — is that lots of working American households cannot afford to pay the bills, save for their retirement or invest in their kids’ education.
The director of the Michigan Future Inc. research group, Glazer declared that it is “far past time for us to understand that a growing economy does not mean that most of us are enjoying a rising standard of living.”
As for ALICE workers – those with Assets Limited, Income Constrained, Employed – they consist of households with a working adult who struggles to pay for basic necessities. That category is based on living conditions after calculating whatever is available in government subsidies for housing and food.
Beyond the 15 percent living in poverty, in Michigan another 25 percent qualify as an ALICE household. That means a combined 40 percent of Michiganders ––in a strong economy with a solid Detroit Three auto industry – routinely cannot pay for basic necessities. As the ALICE data makes clear, that is routinely the case in every county, for every race and at all ages, across Michigan.
Finally, the United Way charity, which created the ALICE measurement tool, offers this:
(ALICE) represents the growing number of individuals and families who are working, but are unable to afford the basic necessities of housing, food, child care, health care, and transportation. … ALICE workers are essential to the fabric of our society. ALICE works in jobs that are integral to our communities, from child care educators and home health aides to mechanics – all workers we rely on every day. The future success of our communities is directly tied to the financial stability of ALICE households. When ALICE suffers and is forced to make difficult choices, we all face serious consequences.
But, to be honest, we may never hear more than a passing reference to ALICE households in Michigan from now until the November 2018 gubernatorial elections.
Tax cuts are a much more simplistic way to woo a broad base of voters who are either thriving financially or struggling to make ends meet