Howes: Business leaders push next-level economic reform
A leading group of Michigan CEOs says it’s time for the state to build on its revival of the past nine years with reform “that propels us even further into economic vitality.”
In its “Plan for a Stronger Michigan,” released Wednesday, Business Leaders for Michigan is pushing a series of steps that it says would make the state more competitive with its rivals and more ripe for investment — a theoretically virtuous circle that would grow incomes and put more people to work.
“Our economic growth since 2009 has been nothing short of extraordinary,” the report says. “We’ve become a contender again, competing successfully for jobs, income and productivity. Our businesses and households are growing.”
But not enough. And as much as the CEO group representing roughly 400,000 employees and $1 trillion in annual revenue correctly identifies the challenges facing the state’s policymakers and business leadership, its proposal features one glaring deficiency: in comparatively good times such as these, there’s little leverage to force the kind of systemic change business is advocating.
“We could be complacent,” Doug Rothwell, CEO of Business Leaders for Michigan, told The Detroit News in an interview. “There’s a danger of complacency. When times are good, we think, ‘Well, we don’t have to work as hard.’”
Exactly right — a key reason another round of economic and government reform will be harder to deliver than the one that emerged from the global financial meltdown. The option to do little, even nothing, and muddle along is a real option, even if it shouldn’t be.
That’s a problem. There’s no financial crisis threatening bankruptcy of the state’s largest city or its system of public schools. There’s no humiliating bailout of the defining auto industry. And if there’s one lesson to be learned from the past decade of sweeping change in Michigan, it’s that the state’s political class and the usual cast of special interests need looming catastrophe to move.
Otherwise, they mostly won’t, content to wallow in nostalgia and generational mediocrity. The result is a widening gap separating the state’s middling position in income growth, economic competitiveness and educational attainment from rival states that improve as Michigan stagnates.
Case in point: even as Business Leaders’ plan calls for raising standards and accountability for public-school teachers and students across the state, Education Trust-Midwest on Tuesday released yet another report showing that Michigan third-graders continue to show declines in reading levels. Despite an $80 million state investment, the state’s kids rank dead last nationally in that critical marker of educational attainment.
This is yet another embarrassment bordering on outrage. But surprising? Hardly. As states like Massachusetts, Florida and Tennessee — Tennessee! — make progress on K-12 educational attainment, evidence continues to mount that Michigan kids keep falling further behind.
And that undercuts both the reality and the perception of a state that lays claim to being a hotbed of industrial innovation able to attract talent and compete for the top spot as the nation’s mobility and autonomy capital. Not with such dismal educational performance and the derision it deserves.
Michigan faces a choice. Eight years after emerging from a “Lost Decade” punctuated by a brutal recession, the state is enjoying a long run of job creation, income gains and tax reform. But none of it is sufficient to keep pace with the “Top 10” states benchmarked by the business leaders.
If Michigan’s economy performed like a Top 10 state today, the business group says, 34,000 more people would be working in Michigan; residents would be earning an average of $9,500 more per person; and the state’s per capita gross domestic product would be $11,700 higher.
Meaning better is not even close to good enough. Michigan ranks 30th in educational attainment, 46th in fourth-grade reading proficiency, 42nd for enrollment in high school and technical education. In the state that helped put the world on wheels and purports to be the epicenter of Auto 2.0, its infrastructure lags rival states — as the current pothole season so jarringly reminds.
The point: companies investing (or considering investments) in Michigan arguably are not receiving as much value for their invested dollar as they could in other states. Not in a competently educated workforce, not in infrastructure and not in a regulatory environment whose relative stability and business-friendliness depends too much on the November election.
That’s why the CEO group already has interviewed most of the candidates for governor, why it is assessing the voting records of incumbent state lawmakers seeking re-election, why Rothwell and other staffers are expected to hold nine forums across the state, and why they’ve produced a YouTube video called Raise your Hand for a Stronger Michigan: they need to get the economic message out.
Business Leaders is pushing a three-pronged agenda it calls compete, invest and grow. It would tighten state fiscal controls and tax policy; preclude local governments from offering defined-benefit pensions and retiree health-care to new hires; encourage service sharing between localities and enable regions to fund assets like transit and cultural organizations without state authorization.
It would back support for public school teachers and principals, set high standards for student achievement and school accountability, and strive to become a Top 10 state for delivering dollars to classrooms. And it would give infrastructure investment priority to transportation and water systems.
“The big benefit we have is we deal in facts,” said Blake Krueger, chairman of the business leaders and CEO of Rockford-based Wolverine Worldwide Inc., a global footwear manufacturer. “And facts that have been researched. When you have facts, that’s a pretty good shield.
“The route from here is steeper,” he continued. “It’s probably going to be harder. We’re optimistic. We made some great progress the past seven years. You do know we are looking over the cliff? Another half a step and we’ll be over the cliff.”
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays.