Compete to Win: Michigan’s Path to Top 10
Summary
Slide presentation titled Compete to Win: Michigan's Path to Top, A Framework for Holistic Economic Development, in which Business Leaders for Michigan state that they released a holistic strategy for economic development in May 2023. The key principles are to prepare for the future we want, to ensure Michigan's talent is a differentiator, to make Michigan the easiest state for people and businesses to grow, and to take a smart, consistent approach to incentives. The slides state that Michigan continues to confront stiff headwinds, with income that has not kept pace and underperformance in the knowledge economy. A closing slide cites a Glengariff Group statewide survey of likely 2024 General Election voters on incentives.
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“Compete to Win: Michigan’s Path to Top 10.”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-02-13-testimony-hecon-2023-hbs-5413-5414-and-5415-business-leader-23a48b1618/
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Compete to Win:
Michigan’s Path to Top 10
A Framework for Holistic Economic Development
In May 2023, Business Leaders for Michigan released a
holistic strategy for economic development
Key Principles
1. Prepare for the future we want
2. Ensure Michigan’s talent is a differentiator
3. Make Michigan the easiest state for people
and businesses to grow
4. Take a smart, consistent approach to
incentives
Michigan continues to confront stiff headwinds on the path
to becoming a Top 10 state
• Income has not kept pace
• We’ve underperformed in the knowledge economy
• “The Michigan 180”
Incomes in Michigan have grown, but not fast enough to
catch the rest of the nation
US:$66,555 70,000
Per capita income ($) 1980-2021
60,000
Michigan MI:$56,494
50,000
US
$39,887
40,000
$30,344 $35,760
30,000
$30,015
20,000
MI: $10,230 This divergence coincides with a decline in
manufacturing jobs in MI and lack of new 10,000
US: $9,843 Professional and Business services jobs
0
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Source: Federal Reserve
Professional and Business Services jobs have seen one of
the largest growth rates in the US, but not in Michigan
Professional and Business Services Michigan
Jobs (indexed on 2000 # of jobs) US
140 135%
129%
130
120
110%
110 100%
100% 100%
100
100%
90
90%
80
70 77%
60
50
01/00 01/02 01/04 01/06 01/08 01/10 01/12 01/14 01/16 01/18 01/20 01/22 01/24
Source: Bureau of labor and statistics
Knowledge Economy Jobs will make up most of future
growth
Projected employment change 2020-2030 (K)
Annual
US projections wage ($)
Professional and
2,020 73,263
business services
Construction 315 70,007
Financial activities 303 80,184
Information 283 87,310
Manufacturing 144 64,768
Logistics 141 70,493
Michigan’s largest portion of Professional and Business Services
sector is Research, Engineering and Design – a sector ripe for growth
Source: Bureau of labor and statistics
Unlike competitors, Michigan has been unable to sustain
consistent polices to support job and income growth
“The Michigan 180”
Michigan’s economic toolbox
1996 2017 2021
Michigan Economic Good Jobs for Strategic Outreach
Growth Authority Michigan payroll and Attraction
(MEGA) Credit tax credit created Reserve cash closing
created fund created What
2012 2019 Now?
All economic Good Jobs for
development tax Michigan program
credit programs sunsets; not
eliminated renewed
It will put Michigan on a level playing field with the rest of
the country
Michigan is one
of only 7 states
without a job
creation tax
incentive
Source: https://info.siteselectiongroup.com/blog/state-tax-credits-for-job-creation-capital-investments,
March 22, 2022
HIRE is modeled after the successful Good Jobs for
Michigan program
From 2017 to 2019….
• $6.61 billion in private investment
• 11,300+ jobs committed
• $31.51 average hourly wage, more than
140% above Michigan’s median wage
• $1.56 billion net new revenue
a return of $5.40 to Michigan for
every GJFM dollar invested
H.I.R.E.: same needed tool with new enhancements:
HBs 5413-5415 (Hoskins, Martus, Filler)- High Income Regional Employment
• Targets and allows for smaller and mid-size companies to move and grow here, or bigger companies to
grow high wage jobs incrementally here that might otherwise be sited elsewhere
Businesses can capture personal income tax withholding from new jobs they create if they add:
• 250+ new jobs at 125% of the regional median wage; or
• 25+ new jobs at 150% of the regional median wage
Cap mirrors GJFM: Cannot exceed $200M in total awards (outstanding promises, not appropriated
revenue) at any one time
Sunsets after 8 years – transcends administrations
H.I.R.E. job creation and wage requirements are higher than
other Great Lakes states
Economic Economic
IL Development for a
IN Development for a MN Minnesota Job OH Job Creation
Growing Economy Growing Economy Creation Fund Tax Credit
(EDGE) Credit (EDGE) Credit
•50 new jobs •Any number of •10 new jobs •10 new jobs
new jobs
•No wage •Wages at least •Wages at least
requirement •No wage 110 percent of 150 percent of
requirement federal poverty federal
level minimum wage
The HIRE program is …
SMART PERFORMANCE-BASED
• Grows high-wage jobs. Businesses It’s fiscally responsible. • Must create jobs at required wages
can only capture personal income "Foregone revenue means the jobs to qualify. If the jobs aren’t created,
from new jobs if average wages would not have been here without the no incentive is awarded.
exceed regional median. incentive, so it does not impact the
• Has transparency and
general fund
accountability. Required regular
• Does not favor only large projects or
• It’s net positive long-term. The state public reporting and evaluations of
certain industries. Open to smaller
forgoes some personal income tax the program’s effectiveness, a 10%
and mid-size companies who pay
in the short-term, but it, as well as penalty if any part of an agreement
high wages. Only casinos, retail and
sales tax and property taxes, accrue with the State was misrepresented
professional sports are ineligible.
to the state over the long-term.
KLA: A Good Jobs for Michigan Case Study
• A Silicon Valley based company that chose Michigan
over 350 other North American locations for its new
R&D facility and second headquarters
• The Good Jobs for Michigan incentive was critical to
bringing KLA to Michigan, along with our large
Industry: Semiconductor concentration of engineering and skilled talent
Approved: 2018
New Jobs Committed: 600 • Since receiving the Good Jobs for Michigan
Private Investment: $217.83M incentive in 2018, KLA has more than doubled its
Average Wage: $112, 104 planned investment and increased its commitment
Incentive Award: $16.2M from 500 to 600 jobs, paying an average salary of
$112,000 – almost 2.5 times the median wage for
the region
Michigan voters support efforts to match the incentives
offered by our neighbors and other competitor states
Question: Do you support Michigan using more, the same, or less incentives as Ohio and Indiana to attract jobs and investment?
More incentives to attract jobs 45.7
Michigan voters
80.3% strongly support
Same incentives to attract jobs 34.6
competing with
neighboring
Less incentives to attract jobs 6.6 states on
incentives
Don’t Know/ Refused…DO NOT OFFER 13.1
Source: The Glengariff Group, Inc. statewide survey of likely 2024 General Election voters, 600 sample,
live operator telephone survey, September 6-11, 2023, +/-4.0% MOE, 95% level of confidence
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