Department Reorganization is New Wine in Old Skin

Corporate welfare doesn’t work, reorganizing won't fix it

There is nothing new under the public policy sun. Gov. Rick Snyder announced last week a government reorganization that will marry Michigan’s existing “economic growth and job training efforts under one department.” They’ve been married before and didn’t work well then either. The fact is, corporate welfare doesn’t work and no amount of reorganizing will make it so.

Michigan had a similar system when economic development efforts and job training efforts were both run out of the Michigan Jobs Commission. Governor Engler split job and talent training up from economic development because he thought it would improve the state’s economic development efforts.

The Michigan Economic Development Corp. was to concentrate on economic development efforts while a separate Michigan Department of Career Development was to handle workforce development. In a 1999 Michigan Information & Research Service report the new MEDC President and CEO, Doug Rothwell was quoted as saying, “The state’s economy has grown to the point where the Michigan Jobs Commission model didn’t fit anymore.”

It’s difficult not be cynical about the moves governors make within the state’s corporate welfare complex because so much of it just ends up being new wine in an old skin.

According to Gov. Snyder, “One of my top priorities has been to make Michigan a national leader in talent development by focusing on workforce training for the jobs of today and tomorrow." He goes on to say, "That effort will require a comprehensive, unified approach to best help Michiganders while working to retain and attract businesses to create more and better jobs.”

Why is a comprehensive, unified approach today necessary when it must not have worked in the past?

At last week’s press conference on the subject capitol correspondent Tim Skubick asked, “So the old system was not working?” The Governor responded, “It was working. Again, you can see that by job creation; jobs being filled. Again we passed the 300,000 private sector job mark now. I’m very proud of that. This is a way to accelerate that. And again, focusing in on what you are going to see nationally as being something that’s only going to be a louder and louder issue, this issue about requisite skills to be successful in the careers that are going to be the careers of the future.”

You can watch it here. (Start at the seven-minute mark to hear Mr. Skubick lob his first question — on rearranging an organizational chart.)

It doesn’t matter how often state government moves its seating chart around. Taking money from many businesses and people and giving it to just a few isn’t a recipe for economic growth and empirical evidence is pretty clear on that.

It’s worth noting that every governor back to Kim Sigler in the 1940s has tried to put their own special stamp on some economic central planning bureau or department. Check out a brief history here.

Many of the job training goals laid out by government too can and perhaps should be reached privately. After all, if companies and people were allowed to keep more of what they earn they could tailor their own needs and desires and revenue to fit the demands of the marketplace.

A better direction is to eliminate all corporate welfare and job training subsidies and return money used to pay for both to its rightful owners. They know how best to reinvest those dollars — in job creating investments or in life enhancing skills development.

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.