Traverse City Record-Eagle

Election 2010

October 23, 2010

Analysis: Truth Squad cries foul on Snyder's TV ad

n Who: Rick Snyder

n Featured Campaign Material: Jobs 2 TV Ad

n Truth Squad Call: Foul

QUESTIONABLE

STATEMENTS

"Fifty percent of the jobs lost in America in the last 10 years were lost in Michigan."

True. Michigan employment last peaked in June of 2000 when the state had 4,690,000 non-farm payroll jobs, according to the Bureau of Labor Statistics. From then until August of this year (the latest month available), the state has lost 859,000 jobs.

In the same period, the United States lost 1,543,000 non-farm payroll jobs. Jobs lost in Michigan represented 55.6 percent of the country's total employment decline.

"How'd that happen? Politicians gave us the worst business tax in the country and regulations that made creating jobs almost impossible."

Snyder apparently is referring to the Michigan Business Tax, which he has repeatedly criticized and said he would replace with a 6 percent corporate income tax.

But the MBT can hardly be blamed for the crippling loss of Michigan jobs over the past decade. The MBT, which replaced the three-decade-old Single Business Tax, didn't even take effect until 2008.

The overarching reason for Michigan's economic collapse over the past decade was the fall of the domestic auto industry, which shed 65 percent of its jobs in the state over the past decade. There are just 123,900 workers in the auto and auto parts manufacturing sectors, down from 352,210 in June of 2000.

But the auto industry had an even larger impact on the state's economy. Hundreds of thousands of high-paying jobs dependent on the industry were lost as the industry plummeted. As a result the state's median household income fell 21 percent over the past decade when adjusted for inflation. Inferior product quality, poor management decisions, uncompetitive labor costs and the Great Recession are generally listed as the main reasons for the auto industry's decline.

Snyder doesn't cite any specific regulations that he claims has made job creation "almost impossible."

"I've created thousands of jobs."

Most of those jobs were created in other states when Snyder was executive vice president and later president of defunct computer manufacturer Gateway Inc. in the 1990s.

During his time in active management at Gateway, the company grew from 1,100 workers to 13,300 employees, 10,600 of which were in the United States. That's according to figures from Gateway filings with the Securities and Exchange Commission.

But the company subsequently fell on hard times after Snyder left, but still sat on its board of directors. The company was sold to Acer Inc. in 2007.

Snyder's job-creating record in recent years as a venture capitalist investing in Michigan companies is less clear. He told the Ann Arbor Chronicle last year that those companies had created 420 jobs.

But in a section of his website listing his job-creation accomplishments, Snyder only cites the 50 jobs created at HandyLab, a medical device manufacturer in which he invested in and served as chairman.

HandyLab was sold last year to Becton, Dickinson and Co., which earlier this month announced it was closing HandyLab's Ann Arbor-area office and moving the jobs to Maryland.

On his campaign website, Snyder says he helped bring thousands of jobs to Michigan as the former chairman of the Michigan Economic Development Corp. and Ann Arbor SPARK, a local economic development agency.

"We'll dump that tax, thin the regulations and jobs will come back."

This is Republican orthodoxy going back to the days of President Ronald Reagan. But recent events in Michigan and the nation have shown that creating jobs is more complex than cutting taxes and easing regulations.

Michigan lost hundreds of thousands of jobs in the final years of Gov. John Engler's reign and the early years of Gov. Jennifer Granholm's administration, even though state tax rates were falling at the time.

And most state regulations in place today were in place when Gov. John Engler was governor, or are the result of laws passed with the help of the Republican-controlled Senate.

OVERALL IMPRESSION

Snyder's assertion that half of all U.S. jobs lost during the past decade were lost in Michigan is jarring, but accurate. But to say those job losses were a result of the Michigan business tax and burdensome regulation on businesses is, at the least, a gross exaggeration.

It was the long decline and near collapse of the domestic auto industry that led Michigan to become the nation's job-loss leader over the past decade. It's unfortunate Snyder and so many others running for office in Michigan this year simply ignore the industry's shrinkage as the major reason for the state's economic malaise.

TRUTH SQUAD CALL

Foul for blaming Michigan's decade-long job taxes on the Michigan Business Tax, a tax that didn't take effect until 2008, and for not citing any specific regulations that Snyder also blames for the state's job losses.

The Center for Michigan is a centerist think-and-do tank founded by former newspaper publisher and University of Michigan Regent Phil Power.

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