“If the new legislature goes right there, in the early days, I think that will send a message that the business committee is not going to work for them,” Barois said. “But I hope it isn’t.”

Wendy Block, Vice President of Government Relations Michigan State Chamber of Commercewho supported Whitmer’s opponent for governor, Tudor Dixon, agreed.

“We know we have to navigate the fact that we don’t have Republican control, but it’s not just for the chamber,” Block said. “It’s going to be some learning curve for everyone who works in Lansing.”

Setting the policy agenda

One of the immediate challenges facing the Legislature is addressing expected changes to the minimum wage and minimum wage. Both are slated for raises on Feb. 19, with a minimum wage of $12 an hour and a minimum wage of $10.80 with tips.

Voters approved the raise — along with rules requiring paid leave — on the 2018 ballot, but the Republican-led Legislature put the expected increase on hold. A Court of Claims ruling this summer declared the move unconstitutional and then set dates for the changes to be made in February.

Business groups say they need more time to raise the minimum wage from today’s $9.87 an hour and $3.75 an hour for tipped workers, which Whitmer does said the Detroit Free Press she is ready to consider.

House Speaker Jason Wentworth, R-Farwell, said lawmakers may revisit the issue in the final days of December.

“I see it happening in a lame duck,” he told Bridge on Thursday.

Whitmer has also made it clear that she wants to expand Earned Income Tax Credit for lower-wage workers.

She proposed increasing her claim for the state in 2022, saying it would offset an average of $150 in additional tax for the state’s 730,000 workers. The proposal came to nothing in the Republican-led legislature.

There was a tax credit cut to 6 percent in 2012 when Republicans overhauled taxes, including cutting Michigan’s business tax. Since then, many business leaders and bipartisan lawmakers have advocated for an income-based credit recovery of up to 20 percent for those who qualify.

“There will almost certainly be a shift toward policies that help workers rather than employers,” said Lou Glaser, president of the nonpartisan organization. Michigan Future Inc. think tank based in Ann Arbor.

Michigan already has earmarked funding for some non-traditional areas of economic development, such as workforce housing and increasing affordable childcareand more would be welcomed by business.

Michigan House Bloc said the issues can bring business and labor together because “everyone agrees that we have room for improvement … (and) we can come together for a solution.”

Another looming challenge is future projects that may be leveraged from the $1 billion Strategic Outreach and Engagement (SOAR) Fund. The initiative was created with bipartisan support last year and offers incentives for “transformational” developments, including the production of batteries for electric vehicles.

After three projects that promise to create thousands of jobs, the state has received 80 percent of the funding added another $640 million to the fund in September.

State Sen. Ken Horn, R-Frankenmuth, helped create the fund and said achieving bipartisan support was important, Horn said, because it raised Michigan’s profile for projects that could employ thousands of people and typically seek incentive packages from multiple states.

“We really can’t afford to let off the gas pedal on that,” said Horn, whose absence is limited to Jan. 1.

Several projects requires legislative approval on amounts already approved by the Michigan Strategic Fund, which funds the state’s economic development program. Horne said he’s waiting for those projects to be approved and hopes the projects already in the funding stage will send signals that the state will keep the program.

Another part of SOAR is to fund site development so that industrial property is screened and ready for construction when companies are exploring investments in the state.

That strategy, Horne said, is “a little more palatable to the Republican legislature,” so future funding could be uncertain.

But economic development is about more than incentives, Horne said. The overall business climate matters, from taxation and environmental regulation to education, with the potential for democratic changes in politics to negatively affect the economy.

“My biggest concern is, will the Legislature have the self-control to grow businesses before they raise taxes or before they start over-regulating?” said Horn.

Whitmer and Democrats such as incoming Senate Majority Leader Winnie Brinks, D-Grand Rapids, have said they are looking to cut taxes — such as eliminating the income tax on pensions — rather than cutting them.

What vision?

Democrats are taking over as Michigan’s business environment has slowly improved over the past decade.

Michigan ranks among states at 10 key measures established by Art Michigan Business Leaders rose from 49th in 2009 to 29th in 2021 and is still struggling to outpace growth in other states. However, the highest rating — 15 — comes from perceptions of the business climate.

The next priority step for Michigan is to focus on Michigan’s workforce, said Jeff Donofrio, president and CEO of Business Leaders for Michigan.

He said that in the long term, Michigan should improve the success rate of college residents (41 percent with an associate’s degree or higher, 30th in the nation) and average family income ($59,000 compared to $70,000 at the national level.)

“Democrats have a chance to show they can be bipartisan,” Donofrio said. “They can identify priorities that unite us and help improve our economic competitiveness.

“Business follows talent,” he continued. “And that will determine whether Michigan succeeds or fails, ultimately, for the next several decades.”

Michigan Future’s Glazer argued even before the Great Recession that state leaders needed to stop thinking they would spur growth with tax breaks — which remain “very factory-driven” for both parties — and instead focus on education to spur more knowledge-based workers. which, in turn, will attract new employers, which will spur wage growth in the state.

“The debate we had to have (when SOAR was proposed) was whether putting $2 billion into transit was the best investment,” Glazer said.

Economic development once meant low taxes and regulation, Glaser said. However, he said: “I think most companies understand that this is not enough. Talent is the most important thing.”

Staeber from Tech Town once worked for the Michigan Economic Development Corporation under former Democratic Gov. Jennifer Grenholm, and is vice president for economic development at Wayne State University. It also raises broader issues.

One example is jobs, Stabler said, as Michigan has about 200,000 unemployed and about 340,000 job openings.

“We don’t need more jobs,” he said. “We need more people to do the work.”

Michigan must implement a strategy to improve the quality of jobs, which in turn should foster community development and prosperity.

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