Michigan’s self-appointed economic doctors may be correctly diagnosing what ails the state, but it’s not at all clear that the people in charge of the metaphoric patient are listening.
They should, because we’re entering new territory: For the first time in forever, booming auto sales and rich automotive profits are not proving the harbinger of broad-based economic lift. Too many remain on the outside looking in.
“Most importantly, we need an agenda that is not about turning the clock back,” Lou Glazer, CEO of Michigan Future Inc., said in an interview Monday. “It hasn’t worked, and our firm conviction is it can’t work. At the moment you have two political parties in Michigan that are not dealing with today’s political realities. They’re just not.”
The predicament is bipartisan. Blame ideologically rigid Republicans fixated with tax cuts and union bashing. Blame Democrats deeply invested in perpetuating the Nanny State shaped with longtime allies in organized labor.
Blame presidential candidates from both parties promising a return to the good ol’ days they cannot deliver because they do not control, even as president of the United States, the global economy. And blame voters who demand easy answers to hard problems evolved over decades.
One week after a Business Leaders for Michigan summit detailed the fiscal stress running through the state’s public sector, Glazer’s Michigan Future on Tuesday will issue a policy agenda it says will create a path “to good-paying careers for all Michiganders.”
The state that put America on wheels and helped birth the modern middle class “has moved from being a high-prosperity to a low-prosperity state,” the report says. “There is a lot of work that is not good-paying. Maybe as much as half the jobs in the Michigan economy don’t pay enough in wages and benefits to pay for family necessities as defined by the Michigan Association of United Ways.”
Think about that — this in the state that once led the nation in per-capita income, that defined 20th-century America’s industrial might, that produced broad economic gains until its affluence, arrogance and complacency combined to push that industry to the brink of collapse.
Add the march of technology and its pitiless replacement of human labor. Add, too, the undeniable link between higher educational attainment and steadily rising wages — a formula that counters the work-a-day mentality still too prevalent among state lawmakers and the voters who put them in office.
Michigan Future describes a “Great Decoupling” in which the 25 percent of population with higher education and opportunity are prospering while the other 75 percent with less educational attainment continue to lag in an economy changing with quickening speed.
The report’s proposed policy prescriptions aren’t likely to resonate with Republican lawmakers in Lansing. Michigan Future implicitly backs tax increases and increased investment in education, particularly for “non-affluent children from birth through college.”
It calls on state policymakers to substantially improve education outcomes and demand accountability up the educational chain, from classroom teachers to top administrators; to create “places” for mobile talent to live and work; to “share prosperity” with folks outside the “high-wage knowledge-based” economy.
Those recommendations may be non-starters in the current political environment. But that reality doesn’t change the facts of Michigan’s economic spiral, or negate the validity of the observation: Michigan consistently lags many rival states in income, educational attainment and other markers.
The study says “the last 20 years provide ample evidence that cutting taxes is not a way to increase state prosperity.” Neighboring Minnesota has a higher tax burden, but ranks third nationwide in the proportion of adults who work, eighth in employment earnings per-capita and 14th in per-capita income. Michigan? It ranks 40th, 32nd and 36th.
“We are living in a world where the gales of creative destruction blow stronger and faster,” the report says. “In an economy increasingly characterized by rapid and discontinuous change, successful individuals, enterprises and communities will need to be agile: able to let go of what is no longer working and embrace — or better yet, create — the next wave.
“This, of course, is the role Michigan played at the beginning of the industrial age. Because we embraced the new — and left behind the old — quicker than anyone else, we became one of the leading-edge communities in the world for most of the 20th century.”
The alarms being sounded by the likes of Michigan Future and Business Leaders for Michigan are necessary, even vital. Absent unifying leadership focused on the challenges of the future, not the battles of the past, they won’t be sufficient.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.