Don’t believe the hype: After the governor wrecked Michigan’s economy with harsh lockdown measures, the state is recovering worse than others.
Don’t believe the hype: After the governor wrecked Michigan’s economy with harsh lockdown measures, the state is recovering worse than others.
L ast month, a national headline declared, “‘Woman in Michigan’ Governs the No. 1 Economy.” The piece laid out the purported amazing work Democratic governor Gretchen Whitmer has done to rebound the state’s Covid-ravaged economy.
The Bloomberg Opinion column, penned by Matthew Winkler, editor in chief emeritus of Bloomberg News, got picked up by other major news outlets, including the Washington Post.
Those of us in Michigan, however, were left scratching our heads.
After suffering through some of the worst Covid lockdowns and restrictions in the country, many Great Lakes State residents hardly see Whitmer as an economic guru.
The “woman in Michigan” references a jab former president Donald Trump took at Whitmer early on in the pandemic. She used it to her advantage while she was actively campaigning to be Joe Biden’s vice president.
Small-business owners especially understand the sting of this governor’s executive orders. Numerous businesses have never recovered, and many have closed permanently.
While the numbers broadcast by Bloomberg may be technically true, context is vital. Thanks to Whitmer’s pandemic-related decrees, Michigan had the highest percentage of businesses impacted by the shutdowns — 32 percent, which is nearly twice the national average.
Consequently, it has the biggest gains to make to catch up to other states that took a more hands-off approach to pandemic governing.
Bloomberg declares that of the 37 states with a population over 2 million, “No state economy has performed better than Michigan’s over the last year,” but that’s accounting for economic-health improvement, and the survey was equally based on employment, personal income, home prices, and mortgage delinquency, among other data points.
When you focus on jobs, the picture isn’t so optimistic.
James Hohman, director of fiscal policy at the Michigan-based free-market Mackinac Center for Public Policy, says it’s important to look closely at job recovery as the true measure of economic growth.
“Did we recover?” Hohman says. “Some states have, but Michigan is not one of them.”
According to the latest numbers from the Bureau of Labor Statistics, Michigan is still down 152,700 jobs since the start of the pandemic, a 3.4 percent decline. This is the 13th-weakest recovery among the states, Hohman observes.
In contrast, ten states have more jobs than they did in February 2020. Not surprisingly, they are Republican-led states — such as Texas, Florida, and Arizona — that imposed far fewer restrictions and more limited shutdowns,
Other studies over the past year underscore the economic harm Michigan suffered during Covid. One review from media outlet MLive of the federal employment data showed that Michigan ranked 43rd-worst in the country for its jobs recovery as of August.
Similarly, a June analysis from Michigan’s Anderson Economic Group found that the state labor market had struggled to recover and still had a “long way to go,” with 217,000 fewer workers and job-seekers in May 2021 than it did in February 2020.
Another study by a University of Michigan–Flint economist highlighted the negative impacts of Whitmer’s second lockdown starting in November 2020, which once again banned indoor dining, theaters, and bowling alleys and shuttered high schools and universities. This alone cost the state 64,000 jobs and saw much steeper employment declines than neighboring states.
This is the reality that Bloomberg’s Winkler avoids. He ends his piece by declaring that, “‘The woman from Michigan’ can take credit for the rebound.”
If that’s true, Whitmer must also take credit for the serious harm she did to the economy through her unilateral orders that bypassed the Republican-controlled state legislature for much of 2020. Many of these emergency orders were arbitrary and absurd, while having a very real impact on personal freedom and the viability of thousands of small businesses.
Some highlights: Early on, Whitmer forced large stores to cordon off areas that sold paint, garden seeds, and other “nonessential” goods, while it was fine for liquor stores to continue selling alcohol. People could take out their kayaks or canoes, but any boat with a motor was off-limits. Golfing and camping were also banned. Even lawn-care businesses had to shutter their services, regardless of the fact these workers spend their days outside and properly distance from one another. Getting a haircut was also deemed too dangerous for months.
Restaurants, gyms, and theaters were some of the hardest-hit industries. For instance, an estimated 3,000 restaurants have closed permanently in Michigan. Strict capacity limits and rules — which Whitmer herself disobeyed last year — remained on dining establishments until June.
Legal challenges from desperate business owners and others negatively affected by the orders got the courts involved, which helped curb the governor’s powers. In October 2020, the Michigan Supreme Court found the governor’s use of emergency powers to be unconstitutional.
Whitmer didn’t give up though. She turned to little-known “epidemic powers” in the public-health code that give the state health department (which she oversees) pretty much the same ability to restrict gatherings and impose lockdowns.
Since last summer, Whitmer has shifted course dramatically, and we can probably thank her reelection campaign for that — she’s running for a second term this November. In response to Michigan’s worst surge yet during the fall and early winter, she avoided mask or vaccine mandates and the shutdown measures she relied on during the first year and a half of the virus.
That’s positive, but if our governor were serious about reviving the economy, she would sign the Republican tax-cut plan that is now on her desk. It would offer widespread relief to individuals and businesses at a time when they are still recovering from her Covid policies, yet she’s already promised to veto the measure. That’s short-sighted.
At the current growth rate, experts believe it’s likely to take another year to regain the jobs lost during the pandemic. This is Michigan’s reality, and it’s not nearly as rosy as some have portrayed.