Tuesday, June 19, 2007

Make Michigan Attractive to Business Again

The stunning inability of Michigan's politicians to talk about the 8,000 ton elephant in the room continues to amaze us here at GR Pundit. Michigan's economy is suffering a "single-state" recession for one primary reason - the United Auto Workers union. Why? Michigan's economy is/was so heavily dependent on the domestic auto industry that any disruption in that industry would surely affect the entire state. The United Auto Workers, along with the management of Ford, Chrysler, and General Motors, conspired over the decades to build extremely lavish and unsustainable benefits packages for unionized employees. However, there was a problem. Toyota. Japanese carmakers entered the market with superior products at lower prices. Suddenly, the domestic big three are completely unable to compete. Here's the rub: they are being prevented from competing because they simply can't reduce labor costs enough. The UAW is standing in the way of the necessary and painful reorganization that is required to bring the domestic auto industry into line with foreign car makers.

While the politicians in Lansing debate how best to tax businesses in Michigan, we notice the deafening silence on the issue that is truly the destroyer of Michigan's economy - forced unionization. This past Saturday's Wall Street Journal had an excellent editorial by Larry Reed of Midland's Mackinac Center. He outlines the case for ending forced unionization. The concept is called "right-to-work," which means that anyone is free to join a union or not. Today's law in Michigan states that if you join a company with a union, you are forced to pay dues.

We only need to look south, within our own United States, to see the contrast between a heavily unionized state and a non-heavily unionized state. Alabama, which is seeing new car factories being built like crazy, is the exact opposite of Michigan. In fact, according to the editorial, "If current trends continue, Alabama will eclipse Michigan in per-capita income in just three years. With base pay and bonuses, and especially when the cost of living is factored in, nonunion workers in many auto plants in the south are better off than their union counterparts in Michigan." That's a powerful statement.

Michigan needs to pass right-to-work legislation immediately. Another interesting point, according to the editorial, is that, between 1970 and 2000, right-to-work states created 1.43 million manufacturing jobs, while non-right-to-work states lost 2.18 million jobs.

The politicians can tinker with taxes all they want, but nothing will substantially change until the real labor environment in Michigan changes. Car factories are being built in the south, while car factories and manufacturers are shuttering in Michigan.

Tuesday, June 12, 2007

Detroit Schools: 75% Dropout Rate

The Detroit News has a short article today on the dropout rate of Detroit Public Schools students. The article states that a report from Education Week, a weekly education newspaper, has done a study showing that Detroit's dropout rate is 75%. You can view the report's web page by clicking here.

However, the bureaucrats at Detroit Public Schools are going ape because they say the numbers are "totally erroneous." They say that they report a graduation rate of 67% to the state. So who is telling the truth? They both are. The difference is that Michigan school districts are only required to report the graduation rate of current seniors. In other words, they calculate it by taking the number of students who graduate from the 12th grade and dividing it by the number of students who started the 12th grade that year. The Education Week report takes the more realistic approach of taking the number of students who actually graduate from the 12th grade and divide it by the number who started the 9th grade. You see, many of the students who drop out do so before the 12th grade. Detroit Public Schools is misleading the public, as is the state of Michigan, by only reporting graduation rates of 12th graders.

So, we see that Detroit Public Schools is a failure by every definition of the word, yet they are still in business. Does anyone wonder why the enrollment at charter schools in Detroit is skyrocketing? Tens of thousands of students are stuck in a utter dismal failure of a school district because the cap on charter schools has been reached. Our governor continues to pander to the teachers unions and refuse to support lifting the cap. Meanwhile, another generation of kids is being denied an education, and consequently is comdemned to continue the cycle of poverty, crime, drugs, etc.

How about Grand Rapids Public Schools? The dropout rate at GRPS is slightly better - 52.8% of GRPS students actually graduate. Even more interestingly, the graduation rate of Godfrey Lee Public Schools (Wyoming) is only 37.8% and 49.1% in Kelloggsville Public Schools.The highest graduation rates in the area are at East Grand Rapids Public Schools (98.1%) and Forest Hills (97.9%). Unfortunately, charter schools are not listed in this report, but we do know that Black River Public School, a charter K-12 school in Holland, is ranked as the #2 school in the entire state by Newsweek.