Unemployment trends
Acton Institute Powerblog

Unemployment trends

As the jobless levels across the nation continues to decline, Michigan continues to lag behind. The nationwide unemployment rate decreased to 5.0% in June, to the lowest levels since September, 2001 according to reports. Meanwhile, Michigan remains at the bottom of the list with the worst unemployment levels, upwards of 7%.

But the key to understanding why these improving numbers have not translated into job gains in Michigan appears in the same report: “Factory payrolls shrank for the fourth straight month as auto assembly and parts plants cut back on production. A glut of inventories has prompted many automakers to slow production lines until demand can catch up. Some 96,000 manufacturing jobs have been lost since August 2004.”

Michigan’s manufacturing-centered economy has simply been unable to compete in the global marketplace, and state policies have tended to restrict rather than promote new business enterprise. An op-ed piece in yesterday’s Wall Street Journal argues that Gov. Granholm’s proposed tax plan

does nothing to reduce the excessive overall tax burden on job providers. The governor’s $2 billion bond proposal places taxpayer dollars under the control of “independent job creation experts” (the administration’s term; in the real world, we call them entrepreneurs) and instructs them to invest directly into the perceived industries of tomorrow.

This additional debt does nothing to improve Michigan’s attractiveness to investors, but instead hopes the administration’s handpicked experts will invest “other peoples’ money” effectively. And the governor’s $40.5 billion budget increases spending $1.6 billion above last year’s level and includes $300 million in tax increases. History and basic economics teaches us that Gov. Granholm’s attempt to tax-spend-and-borrow Michigan to prosperity will fail.

The answer to increasing economic growth, creating jobs and raising incomes in Michigan is simple and works whenever tried: Reduce taxes.

Jordan J. Ballor

Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is director of research at the Center for Religion, Culture & Democracy, an initiative of the First Liberty Institute. He has previously held research positions at the Acton Institute and Vrije Universiteit Amsterdam, and has authored multiple books, including a forthcoming introduction to the public theology of Abraham Kuyper. Working with Lexham Press, he served as a general editor for the 12 volume Abraham Kuyper Collected Works in Public Theology series, and his research can be found in publications including Journal of Markets & Morality, Journal of Religion, Scottish Journal of Theology, Reformation & Renaissance Review, Journal of the History of Economic Thought, Faith & Economics, and Calvin Theological Journal. He is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary and the Henry Institute for the Study of Christianity & Politics at Calvin University.