Michigan Economic Development Corporation: Epic Failure

In his recent article, Mackinac Center for Public Policy's Michael LaFaive stated, "The Michigan Economic Development Corp. was created in 1999 and charged with 'providing services to create and retain good jobs and a high quality of life.' The program has been a patent failure and 2009 should be the year that it is eliminated." Here is further evidence of how ineffective and costly to taxpayers the MEDC really is.

The Upjohn Company was THE place to work in Kalamazoo for over 50 years. They always took pride in the fact that they had never laid-off an employee. Research, development and manufacturing of world-class pharmaceuticals took place in Kalamazoo. The largest pharmaceutical manufacturing plant in the world is still located in nearby Portage, Michigan. Unfortunately, Upjohn became of victim of global competition and was ultimately acquired by Pfizer, Inc. Over the years, work was consolidated to other locations and Kalamazoo lost virtually all of its talented pool of scientists and researchers. The final blow came in January of 2007 when Pfizer announced closure of its R & D facilities in Ann Arbor and Kalamazoo. But, never fear! Along came the MEDC's Strategic Fund Board in June of 2007 with the creation of the Pfizer Asset Retention Fund, (PARF). $8 million was set aside to provide employers with incentives to hire displaced Pfizer workers. But, as reported in the Kalamazoo Gazette last month, the program has been an Epic Failure. According to the Gazette, $5.65 million was dispersed to 29 companies to hire 112 former Pfizer employees. In the end, only 50 ex-Pfizer employees have been retained. That comes at a cost of $112,000 of taxpayer dollars for each job created. The program might have been more successful, but one month after the fund was created, Governor Granholm announced she was holding the money hostage until the budget was settled. That did not happen until October and it took the PARF another couple months to process the paperwork. Alas, by then most of the displaced workers had left to find employment in other states. The bottom line is this: when is comes to job creation, central planners can never match the free market. Every tax dollar the government-run economic "development" corporation takes to "invest" in job creation, (and they took $31 million last year) is one more dollar taken away from private companies and entrepreneurs who know much better than government ever will where best to invest. Michigan has been bleeding jobs for nearly ten years. What is the best thing government can do to "create" jobs? Reduce the burden of regulation and business taxation. It has been demonstrated in other states that when the shackles of government are removed from small and large businesses, the environment for new investment by employers improves. Challenge your legislator to help balance the budget by eliminating the MEDC. Contact your state representative.       Contact your state senator.