few months ago, Western Michigan University commissioned a survey to find out which states were doing the best at attracting high-tech and new-economy businesses – the businesses, that is, that Michigan needs if we are ever to have a future. You might assume the states with the lowest tax rates were doing the best.
But that would be dead wrong. The survey found that having an educated work force was the most important thing to tech-savvy entrepreneurs who are thinking about expanding their operations. Western hired EPIC-MRA to look at the business climate in five states, which ended up being ranked in this order: California, followed by Massachusetts, Illinois, Michigan and Ohio.
Which of those states have the highest business taxes? Massachusetts and California, by far. Do the entrepreneurs surveyed like paying higher taxes? Not very much. But they are willing to do so, because what they get back. An educated work force, and a decent infrastructure, both high-tech, as in fiber-optic cable, and lower-tech, as in bridges and roads which weren’t collapsing.
What was most disturbing to me about the Western Michigan survey was not that Michigan ranked fourth, both in overall desirability and in having an educated work force.
What was worse was that our businessmen were dead last in valuing a highly educated work force and understanding how important that is to our state’s future. Only a third of our businessmen really get it, as opposed to twice that many in the leading states.
That has to change, or we are doomed. There are echoes of this in the Small Business Association of Michigan’s recently released entrepreneurial scorecard, which compares us to all the other states.
If taxes were the biggest problem, we ought to do very poorly on the category which looked at how business was impacted by Government Efficiency and the Regulatory Environment. But in fact, we were 13th, meaning we are better off than two-thirds of the other states. On the other hand, we were an appalling 42nd in the quality of our infrastructure. We also don’t seem to be doing enough to encourage new business and new entrepreneurs.
What I think both these studies indicate is that many of us are still stuck in the world of the past, where all that was needed for a good manufacturing job was muscle. Time was, if Michigan’s economy was down, a few turns of the business cycle and a few new tail fins were sure to do the trick. Those times are gone now, forever. All of us need to realize that.
Michigan needs a better educated work force – and a better infrastructure to support it, and the only way to create both is through the T – word. Taxes. Unfortunately, the political climate is such that nobody can suggest new taxes any more.
So here’s what I suggest. From now on, we call them “economic revitalization transfer payments.” That sounds much better. Especially, that is, if they eventually cause a successful new flowering of the J word, namely . . . good jobs.