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Gretchen Whitmer – Whitmer touts growth in auto industry, but jobs data doesn't show that

Gretchen Whitmer – Whitmer touts growth in auto industry, but jobs data doesn't show that

Michigan Gov. Gretchen Whitmer has made economic development in the state a key focus as she hits the campaign trail to seek a second term. In her bid for reelection, she has zeroed in on Michigan’s auto industry specifically, claiming she has overseen the addition of tens of thousands of new jobs over the last few years.

“Since I took office, Michigan has added more than 25,000 auto jobs,” Whitmer wrote in a June 8 tweet. She has made similar statements in the past. In a June 2 tweet, she appeared to take credit for the growth she claims occurred since her tenure as governor began.

“I’m thrilled about @Ford’s $2 billion investment to create 3,200 good-paying auto jobs — add this to the nearly 25,000 auto jobs we’ve created!” Whitmer tweeted the day the automaker announced plans to add jobs supported by the state’s economic development fund. Republicans hoping to unseat Whitmer have pushed back against the claim.

Publicly available employment data does not show that Michigan has gained 25,000 additional jobs in the auto industry since January 2019 when Whitmer entered office. Whitmer spokesperson Bobby Leddy wrote in an email that the jobs figure from the governor is “a conservative estimate” of the jobs auto manufacturers and suppliers have announced since 2019 as part of auto manufacturing expansions supported by the state.

Leddy and Michigan Economic Development Corporation (MEDC) spokesperson Otie McKinley provided a list of dozens of companies that have collectively promised to create more than 25,000 jobs in Michigan’s auto industry in exchange for hundreds of millions in tax relief and government grants.

Many of those jobs have already been created and currently employ people, Leddy wrote. But the number of auto jobs Whitmer touts also includes thousands that do not currently exist. Those promised by GM, for instance, will require breaking ground on a new plant, Leddy wrote.

“Governor Whitmer is proud of her record of job creation, particularly in the auto industry, as we move to cement Michigan’s legacy of manufacturing,” Leddy said in a statement.

It is unclear how far along the companies are in their promise to create the jobs they’ve committed to add to the state’s economy.

MEDC “does not have a real-time account as to the exact number of jobs that have been created by each individual company,” McKinley wrote in an email. Each company must submit reports of the new jobs it creates based on a previously agreed upon reporting schedule, he said. 

Jobs are created and destroyed all the time in the auto industry as companies hire or lay off workers and open or close plants.

That’s why many look to net employment numbers in an industry over time to determine whether a state has created more jobs than it’s lost, said Brad Hershbein, a senior economist and the deputy director of research at the W.E. Upjohn Institute for Employment Research. “So how many more jobs do we have now than we did before?” Hershbein said.

Using that measure, Whitmer’s claim that Michigan has added more than 25,000 new auto jobs isn’t borne out by employment data from the Bureau of Labor Statistics.

The number of auto jobs in Michigan as of May 2022 — the most recently available data — was slightly lower than it was in January 2019 when Whitmer took office.

Bureau of Labor Statistics employment data in the transportation equipment manufacturing industry is the best way to analyze auto job growth in the state during that time period, according to Wayne Rourke, the associate director of Michigan’s Bureau of Labor Market Information and Strategic Initiatives.

It’s a broad category that encompasses manufacturing outside the auto industry, including aerospace, railroad and ship manufacturing. But the vast majority — about 90% — of the transportation equipment manufacturing industry jobs are within the motor vehicle and motor vehicle parts manufacturing sectors.

The bigger transportation equipment manufacturing category allows for easy comparisons of job numbers between two different time periods since Michigan’s labor market information bureau publishes adjusted data that accounts for fluctuation in the job numbers resulting from typical seasonal variation in an industry.

When Whitmer entered office in 2019, there were 187,890 jobs in transportation equipment manufacturing, according to seasonally adjusted data published by the bureau. In May 2022, there were 184,500 jobs in the sector, a decline of 3,390 jobs.

Comparing each month’s employment data in the motor vehicle and motor vehicle parts manufacturing sectors across years shows that employment in the auto industry took a huge hit during the COVID-19 pandemic but has essentially returned to pre-pandemic levels.

Hershbein said it was “a little bit misleading” to refer to jobs expected in the future as those that the state has already added or created.

“Claims about what could happen in the future should always be taken with a fair amount of salt, and this is long true in the economic development world where we give incentives to businesses to create jobs and they don’t always end up doing that,” Hershbein said. “It’s nice that the jobs are announced. It’s certainly better than not having jobs announced. But in terms of people’s standards and well-being, we have to see those jobs actually materialize.”

Hershbein also said that the general climate of economic uncertainty casts a bit of a cloud over state deals with auto manufacturers. “There’s still a possibility that the economy could go into a recession,” he said. “If that were to happen would they still go forward with their plans? Would they scale it down? Would they postpone them? A lot could still happen.”

MEDC requires companies to fulfill their job creation commitments to receive state support, McKinley wrote in an email. Funding isn’t provided to companies that don’t create the jobs they’ve promised, he said.

“I have a high level of confidence that any job promised by a company signing one of these contracts will fulfill their obligations,” said Mike Johnston, the vice president of government affairs for the Michigan Manufacturers Association. He acknowledged that Whitmer’s claim is not borne out in the most recently available Bureau of Labor Statistics employment data, but said that it provides an accurate picture of where the state’s auto industry is heading.

“If anybody looking at the economy doesn’t look at the future of the economy, they’re looking too short-sighted,” he said. “Any snapshot on the economy has to come in the context of where the economy is going and Michigan — in particular the manufacturing sector — is looking very positive.”

Bernard Swiecki, the director of research at the independent Center for Automotive Research, said that he wouldn’t call Whitmer’s statement misleading.

“It’s positively oriented, but it’s not out of whack with standard industry practice. When states and communities announce these things, they do focus on the new creation,” he said.

“It’s not like it’s a made up number,” he said. But when someone sees it, they might think Whitmer is referring to a net gain in jobs since she entered office. “And that’s not what it really is. So basically, it’s a number that needs context.”

Our ruling

Whitmer claimed that since she entered office, “Michigan has added more than 25,000 auto jobs.” Her number refers to jobs automakers and suppliers have created, but it also includes jobs they have committed to add in exchange for state support that don’t currently exist.

Current employment data does not show that Michigan has gained 25,000 jobs since January 2019, when Whitmer took office. Whitmer is referring to jobs promised through state deals over the last few years. But the claim ignores critical facts that would give a different impression. Thousands of those jobs haven’t been created yet, and employment data shows those added haven’t made up for job losses in Michigan’s auto industry.

We rate it Mostly False.

Source: PolitiFact.

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