What worries most about Michigan politics is that we have two parties who by and large are trying to make the 20th Century work again. A factory-based economy supported by farming and tourism. As we have documented in our reports, a factory-based economy has led Michigan to fall from one of the most prosperous states as late as 2000 to now one of the poorest states.
We will not have a mass middle class again, with rising living standards, until we transition to the knowledge economy that is the path to prosperity in the 21st Century. Add to that the reality that a rising economy is not enough to raise living standards for most Michigan households. Corporations and a small percentage at the top are doing great here and around the country. But unlike in the past, a growing economy is not generating shared prosperity.
These are the two great challenges that Michigan policy makers need to address if Michiganders are going to enjoy a rising standard of living: the need to transition to a knowledge-based economy and the need to widely share economic growth.
The Detroit Free Press just published two op eds by Democratic office holders that address these challenges. Quite encouraging. Both worth reading! They lay out substantive ideas for how we might deal with those two challenges.
The first from John Austin, President of the Michigan State Board of Education, makes the case that Michigan Democrats need to put forward a positive economic agenda for the state. His proposed agenda looks to the future, not the past. His priorities: education, blue green industries of the future, public investments to create communities people want to live in and a state that welcomes all. (Austin leads the Michigan Economic Center. Check out their website for more on how to grow the Michigan economy.)
The second comes from State Representative Jim Townsend. Townsend details how Michigan tax policy has exacerbated income increasingly concentrating in corporations and a few at the top of the economic pyramid, rather than raising living standard non elite Michigan households.
Townsend notes that MIchigan ranks 48th in the proportion of tax revenues that come from business. He continues: “Adjusted for inflation, Michigan’s median household income has declined by $15,633 (24%) since 1999, and none of the recent reforms have done anything but make the problem worse by shifting taxes onto working families and retirees, and cutting the essential services we need to compete for jobs.”
Townsend’s solution: a graduated income tax that would raise taxes on top earners while lowering taxes for the rest. And generate enough revenue to “Help restore our crumbling infrastructure; ensure safe and sustainable communities; provide our children with the education they need to realize their fullest potential; and lower tuition rates to ensure graduates aren’t burdened by unimaginable debt.”
