State, Media Likely Oversell Impact Of Taxpayer-Funded Business Grants
How long will a $300 state handout keep one person employed?
Media outlets across the state are repeating claims from state government that certain grants of taxpayer money have helped Michigan businesses keep 54,000 jobs during the coronavirus pandemic
But a closer look indicates it is highly unlikely that the handouts, called Michigan Small Business Survival Grants, do that.
MLive reported that, according to the state, the grants are “helping retain more than 54,000 jobs in Michigan.”
According to the Michigan Economic Development Corporation, it was up to each business to determine how many jobs would be retained or rehired at the time it applied for one of the grants.
The state then used these figures to claim that just that many jobs had been saved.
But a review of the data suggests the actual number of “retained” jobs may be a fraction of the official claim.
The state has presented figures showing 55,783 jobs were retained by 5,960 businesses that got a share of $52.5 million in state taxpayer funds. That averages out to $941 per job saved, or about 100 hours of employment at Michigan’s $9.45 per hour minimum wage.
But many companies received far less than the average grant amount.
The nonprofit Little Villagers in Wayne County received a $5,000 survival grant and is shown as retaining or rehiring people for 22 jobs. The amount comes to $227 per employee whose job was allegedly saved.
Farah Franchise in Washtenaw County listed 25 jobs retained or rehired. That business received a $7,500 grant, or $300 per employee claimed.
The 76th Street Truck Stop Diner in Kent County listed 50 jobs retained or rehired, and it received a $11,375 grant. That would amount to $228 per employee retained.
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.