Beat that dead horse

-Hannah Mead, MCPP intern, 2008

I’m always baffled by Michigan’s economic improvement strategy: tax the successful businesses to subsidize unviable ones.

Commenting on new “job-creating measures,” Gov. Jennifer Granholm and Speaker of the House Andy Dillon remarked,

At a time when more job-seekers are entering the workforce, Michigan’s already battered economy is feeling the effects of a struggling national economy being driven by a crisis in the subprime market and high oil prices.

Their solution? Film incentives, tourism promotion (which focus, as my coworker regularly notes, is counteracted by our torn-up roads) and “a loan program for job creation or retention projects.”

The Mackinac Center’s Jack McHugh provides alternative analysis of Michigan’s obscene unemployment:

It may be no coincidence that Michigan’s unemployment rate hit 8.5 percent last month, just when tens of thousands of low-skill, low-experience young people were getting out of school and hitting the job market. The unemployment figures are seasonally adjusted, but here’s something there’s no adjusting for: The startling figure was attained just a few weeks before the state minimum wage rises to $7.40 per hour.

…Fact is, these youngsters are just less productive than those with a few years under their belts, and  many employers figure they just won’t add $7.40 worth of value to an operation. So rather work 40 hours a week at $5.75 or $6.50, these low-skill workers get to work zero-hours at $7.40.


One thought on “Beat that dead horse

  1. On the other hand, those young, low-skilled employees can be had for just 85% of the minimum wage, so their minimum wage will be increasing to $6.29 next week. When I worked retail (a job that doesn’t require a whole lot beyond the most basic math, hygiene, and interpersonal skills), we were actively recruiting the high school kids in the summer. There’s not a whole lot of difference in output between an 18-year-old recent grad and a 17-year-old rising senior, but the younger kid is a lot cheaper to hire.

    Of course, this is hitting the college-aged population the hardest.

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