Michigan has problems (and not just the football team)

Michigan has suffered a very bad fate.  From 2000-2006, the state lost 336,000 jobs.  Its unemployment rate is the highest in the country at around 7.2% (http://www.mlive.com/newsflash/index.ssf?/base/business-15/1206543541113000.xml&storylist=newsmichigan) and it has lost its AAA bond rating.

I traveled to Michigan not too long ago on business and while listening to the radio, I heard about the Michigan economic development council.  It is in essence a group of top Michigan entrepreneurs that are working to encourage others to move to Michigan as it is a great place to work.  The president of the group for the last year?  The CEO of Comerica Bank.  That is great, except that Comerica Bank recently moved their headquarters away from Detroit to Texas because it was not economic for them to remain in the state.  The Michigan economic development council cannot even keep their own leader and spokesperson in the state!

As Michigan faced trouble and faces trouble today, the government has decided to raise taxes.  This was great news to the public employee unions.  The troubles of the state can be found most profoundly in Detroit especially given that Oakland County, not too far removed from the city in the northwest suburbs (and where I grew up by the way) is one of the top 10 wealthiest counties in the country!!!

In 1950, Detroit had 1.8 million resident and ranked FIRST in median income of all major cities in the U.S.  Today, Detroit has only 871,000 people and ranks 66th out of 68 major American cities in median household income.  Its population has shrunk by 46%.

But what about the second-largest employer in the city, the government?  During the same years that the population was shrinking by 46%, a huge number, the number of city employees only shrunk by 30%.  Of the city’s 25 largest employers, 40% of jobs are provided by state, county, and city governments which comes out to a ratio of 50 residents per city employee (Chicago has 68 and Indianapolis has 223).  This means that there are almost as many jobs in the city of Detroit paid for by taxes as there are private sector jobs providing a tax base!  How do you possibly encourage companies to move to Detroit with these facts???  Given that the leadership of the city is dominated by Democrats and has been for decades, how are they ever going to unwind this bureaucracy???

The largest employer in the state is the Detroit public school system.  How do you think that the Detroit public school system ranks in the country?  Let us explore:

The Bill and Melinda Gates Foundation found in a 2006 that only 21.7% of entering high school freshmen in the Detroit public school system graduate on time.  The national average…70%.  To be fair, a study found that the graduation rate has risen all the way to 24.9% in 2007.  21.7% was the lowest rate among the fifty largest school districts studied.  The Gates Foundation found that Detroit’s eleventh largest school district in the nation is the worst big-city education bureaucracy in the country. 

The Detroit schools will spend $7,469 per student this year.  By comparison, Marin County, California spends $6,579 per student and graduates 96.8% of their students.  Oddly enough, the Bureau of Labor Statistics show that the Detroit metro-area has the highest average public school teacher pay of ALL major metro areas at $47.28 per hour.  What do you think about that Obama???  Do we need more money to help “lift up” these troubled students???

State law prohibits charter schools in districts with under 120,000 students; maintained at a level just beyond the districts in Detroit so that no charters can be created.  Charter schools have worked in Detroit when they are allowed to operate.  University Prep has a graduation rate of 95% and 100% of its graduates go to college or post-secondary programs.  The Cornerstone schools have seen a high school graduation rate of over 90% since their foundation in 1991!

The problem with Michigan is that it is a system and government run by bureaucrats.  We need more investment and freedom in our great state and we need to make sure that the ails of Michigan do not spread!

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