Gov. Gretchen Whitmer appears to have decided the best way to grow Michigan’s population is to turn it into her version of a workers’ paradise.

Policies pursued this year by the governor and her new Democratic-majority Legislature are largely being dictated by labor unions and tilt the balance of the workplace relationship distinctly to the advantage of employees.

Even if the strategy works and new residents come flocking here to take advantage of a host of new state-mandated benefits, it raises a key question: Where will they work?

A well-tested truth is that raising the cost of doing business in a state lowers the number of jobs businesses create. The governor’s latest proposal, universal paid family leave, is designed to raise business costs. While the details are still sketchy — the least transparent governor in recent memory once again left her Wednesday address without taking questions — the program apparently will be supported by a payroll tax, similar to the levy that funds unemployment benefits. The Michigan Chamber pegged the cost at $1 billion.

In Minnesota, which has a similar leave mandate, the tax is 0.7%. And while that may not sound like an enormous burden, when added to all the other costs added by policies proposed or already passed it could be the proverbial straw on the backs of many businesses.

Mandated paid leave will add a disincentive to hiring. If, as proposed, it applies to all business with more than 50 employees, employers with growing businesses will have to weigh the cost of hiring beyond that threshold.

Sen. Erika Geiss, D-Taylor, proposed a leave program earlier this year to provide 15 weeks off in a year for the birth of a child or a personal or family member’s illness.

That plan would give workers a percentage of their regular pay and be funded by a payroll tax.

It’s not known how the proposal will be affected by a pending Michigan Supreme Court case weighing whether or not the then-Republican Legislature acted unconstitutionally when it sidetracked a voter-passed leave plan. That proposal would provide one hour of paid leave time for every 30 hours worked, generally capped at 72 hours in a year. That Whitmer intends to model the agency that will administer her family leave program after the Unemployment Insurance Agency is a red flag.

The UIA is the most chronically incompetent agency of state government and has been riddled with mismanagement for decades. Michigan paid up to $8.5 million in fraudulent unemployment claims during the COVID pandemic.

A costly new state-mandated employee benefit will be a job killer. It could also very well lead employers who already offer leave to their employees to drop their leave programs and off-load their costs to the state.

Whitmer sees this a way to boost population. But of the 11 states that have mandated leave, only one, Colorado, is among the top 10 fastest growing states, and it sits in 10th place. If the state feels assuring all workers get paid leave time is essential, it should build incentives into the business tax code to encourage employers to work with their staffs to craft programs that make sense for their workplaces. In unionized workplaces, the leaves should be part of contract negotiations.

That’s a better approach than a one-size-fits-all program administered by a state that has proved inept at managing the employee benefit programs it already has in place.

–The Detroit News