News Story

Corporate Subsidy Agency Claims Giving 18 Firms Average $321 Per Job Saved Those Jobs

Government officials in charge of certain programs have a strong incentive to overstate their programs' impact and benefits.

The Michigan Economic Development Corporation has been the source of many examples of this. A recent press release issued by the state agency in charge of giving taxpayer funded subsidies claims that some of these were responsible for companies “retaining” 21,000 jobs during the coronavirus epidemic.

But details of the handouts appear to tell a different story.

For example, Northern Life Yoga in Sault Ste. Marie recently received a $2,000 grant from one MEDC program.

The facility celebrated its 10th anniversary on March 15. The next day, its doors were closed by executive orders imposed by Gov. Gretchen Whitmer. The yoga business offered online only classes until it was permitted to re-open for in-person business on Sept. 1.

North Life Yoga has six part-time instructors, according to owner Allie Brawley.

“I was grateful for the grant money,” Brawley said. “Every penny helps a small business.”

The MEDC also reported handing out $2,500 to Bruno’s Bar in St. Johns and claimed that it retained 23 jobs at that business. That comes to $108.70 per job.

This one MEDC program gave 18 businesses in one region a total of $45,000, or an average of $321 granted per job, for which it now claims credit for saving.

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.