Why Michigan Has the Second Highest Unemployment in the Country

Michigan has the second highest unemployment in the country because; every time our Governor speaks she can not help herself about talking about tax increases. The reality is that you can not tax a state in to prosperity.

The state congress finally pushed through getting rid of the single business tax to the point that the governor could no longer veto it no more. Now the governor says she needs to replace the tax. Michigan needed to get rid of the single business tax because it was blocking new jobs coming to the state. Although now that we have gotten rid of the single business tax, now we have our governor out there stating that she needs to raise taxes.

Michigan has high unemployment for several reasons from a manufacturing stand point:

• High taxes
• High labor wage rates
• Higher likely hood of getting a combative union than other parts of the country.
• Mandatory health insurance requirements that drive up the health care cost to labor.
• Less flexibility by the state and local governments on tax abatements.
• Track record of suing over tax abatements if targets are not met.
  

Although governor Granholm has succeeded in acquiring engineering and high tech jobs such as the Toyota Engineering Center and Google. That’s neat; there will be some trickle down jobs from those. Although, had Michigan aggressively went after the assembly plant as neighboring Ohio and Indiana did we would have had an assembly plant.

What is the big deal about an assembly plant? The transplant automotive manufactures make it requirement of their suppliers to have their plants with in a half hour of their plant. Instead of only adding 3000 to 5000 jobs, you are talking about doubling those numbers of jobs. On top of all of the increased jobs directly associated to the plant, there is typically a construction boom just for the housing alone. The failure was ignorance.

How do we make Michigan great again? Shut up about tax increases. The Engineering jobs are neat, but it does nothing to replace the thousands of blue collar jobs lost. The elimination of the Single Business Tax was needed to give Michigan a fighting chance. Every time there is talk of creating a new tax to replace the single business tax, who in their right mind would want to put a plant where they will be hit with another new tax. How do you negotiate tax abatement for a tax that is not there yet?

You can not tax your town/community/state back into prosperity. You have to believe in the theory that when you cut taxes, the increased prosperity due to the tax cut will generate more taxes than you received before. The greatest President of the 20th century Ronald Reagan proved this and so did President George W. Bush.