News Story

How Much of Michigan's Troubles Can Be Blamed on the Auto Industry?

With the GOP presidential candidate debate held Wednesday night in Michigan, the state’s economic woes received national attention from an Associated Press story that pinned the malaise on the auto industry.

“But Michigan's economy is still bad, a victim of the auto industry's long slide,” the AP story reported as it was picked up all across the country.

Blaming the auto industry for the brunt of Michigan’s problems is not uncommon.

Former Gov. Jennifer Granholm used the auto industry as a reason why the state languished during her eight-year run.

But James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy, said that’s not a fair assessment of what went on in Michigan under Gov. Granholm.

“It’s fingering the blame for all of Michigan’s economic problems on one specific industry,” Hohman said. “All of Michigan’s industries have been doing poorly.”

The U.S. Bureau of Labor statistics tracks jobs in 11 major industrial categories, such as manufacturing, construction and government.

Michigan had a net loss of jobs in 10 of those 11 categories from April 2000 to September 2011. The only growth was in the “education and health” category.

The auto industry and related transportation equipment manufacturers accounted for only 23 percent of the 908,300 total jobs lost in those 10 major industrial categories that reported net job losses over the past 11 years.

“The former governor’s point that she was not exclusively responsible for Michigan’s economic problems is correct,” Hohman said. “Conversely, her analysis that it was all the auto industry’s fault is false. … What she can be blamed for is responding to broad economic problems with policies designed to help only those she favored. In addition to those ineffective and harmful responses, she made other bad moves for the state economy. She presided over a vast increase in licensing and regulation, not to mention her increases in business and income taxes.”


See also:

Granholm the Tax Cutter?

Gov. Granholm Offers Nation Advice on Job Creation

Bad News About State Jobs Program "Not Heard" by Granholm