News Story

Study: Proposal 3 Would Result in Lost Jobs, Higher Costs

Michigan would have 10,540 fewer jobs in 2025 if Proposal 3 passes in November, according to a new study on the renewable energy mandate proposal.

The study, done by the Mackinac Center for Public Policy and the Beacon Hill Institute in Massachusetts, also concluded that Prop 3 would lower disposable income in Michigan by $1.42 billion; reduce net investment in the state by $147 million and impose net costs on the Michigan economy of $2.55 billion.

"Our study also indicates that even if voters reject Proposal 3, Michigan residents will still bear some of these costs," David Tuerck, one of the study’s authors from the Beacon Hill Institute, said in a release. "Michigan already has a 10 percent renewable energy standard in effect, and our economic modeling indicates that it, too, has substantial net economic costs for the state, not benefits."

Cost estimates for Prop 3 were not included in a study coordinated by the Michigan Environmental Council and Michigan State University that has been widely — and inaccurately — quoted for the number of jobs the mandate will create. The study said Prop 3 would create 74,000 job years, but many in the media have continued to report that as the number of actual jobs. The difference is significant. One job held for 20 years is 20 job years, but still only one job.

Proposition 3 would add to the state constitution a mandate that Michigan produce 25 percent of its energy from renewable sources by 2025.

If the proposal passes, conventional energy sources will need to be kept on standby because of the intermittent source of wind in the state, the study concluded. It also will be costly for residents and businesses.

Residential electricity users could expect to pay between $170 and $190 in 2025 for the mandate; industrial businesses could see costs between $49,730 and $55,680, according to the study.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.