The Economy in Michigan

[d8alterego]

Here is an interesting article from the NYtimes.

My favorite part was this:

"North Dakota

[NorthCoast]

High labor costs, regulation, fear of unionization, and burdensome business taxes are a factor. I have overseen Human Resources operations at a couple of very well known businesses, and these topics regularly come up when there are discussions of Michigan. When the auto industry (and the business environment as a whole) was stronger, the state could get away with this, but I think the economy will force a fundamental shift in the relationship between business, labor, and government...ZD

[d8alterego]

I agree. The state has to evolve or it will face the same economic mistakes over and over. By diversifying into different fields (such as alternative energy, R&D, health sciences, manufacturing, and agriculture), it should do better. Add in there some highly efficient mass transit, and you have a winning combo.

[mfellows]

Given the forced restructuring of some domestic automakers and economic pressures across the board, it looks like Michigan is in for a big shift one way or another. Our practice of offering financial inducements to businesses (such as movie producers) for investing or just doing business here has long been criticized by those arguing for a level playing field and against trying to chase the hot industry and trying to pick winnners. I just wonder whether those Act 198 industrial tax abatements awarded businesses for investing here in the last few years will reallybear fruit after the standard 12 years or so. An awful lot of taxable value has been left off the tax rolls, to the detriment of all sorts of local tax units -- schools, libraries, etc. -- on the bet that tax revenues will benefit once the abatements expire.

MSU's Land Policy Institute is sponsoring an interesting event in Lansing this week, April 14 and 15, that will look at those kinds of questions -- how to best ensure prosperous communities. A new LPI report (at that Website, in the right-hand sidebar) essentially argues that because the much-coveted "knowledge workers" of the new economy are more inclined to seek a great place to live than a high-paying job, the money will eventually chase them. Bottom line, you create desirable places to live, with green areas and other amenities, and you're halfway to growing an economically sustainable community. I think that will resonate better in the long run for a lot of people tired of the old models of economic development. Here's a press release talking about the event, with links to social networking opportunities surrounding the LPI's Place and Prosperity Summit.

I wonder if investing in parks, bike paths or waterfront improvements actually works better now than cutting selected taxes ...