The COVID-19 pandemic has put a brutal hurt on the Michigan economy, as it has on states across the nation.
But with billions of dollars available through previous relief appropriations and the recently signed American Rescue Plan Act, officials believe the state is on its way back.
Gov. Gretchen Whitmer on Thursday joined local entrepreneurs and business leaders to unveil the Michigan Economic Jumpstart Plan, which would allocate a portion of the federal relief funding to support and invest in working people and small businesses in Michigan.
Under the governor’s plan, the state will increase incentives to boost wages to attract applicants, provide grants to small businesses to ramp up hiring, and expand access to childcare for families with young children who want to return to work but cannot.
“As we continue to take steps to jumpstart our economy, we need to have a real conversation about putting Michigan back to work with better jobs and bigger paychecks,” Whitmer said. “Under the Michigan Economic Jumpstart plan, we can harness these once-in-a-lifetime economic opportunities and channel it to raise wages, invest in small businesses, and uplift families.
“I look forward to engaging the legislature, local communities, and Michiganders as we continue thinking through the best ways to use the federal funds and state surplus to turbocharge our economy and make a real difference in people’s lives,” she added.
With more than $2 billion remaining in Coronavirus Response and Relief Supplemental Appropriations Act funding, nearly $20 billion in total funding from the American Rescue Plan, state officials said Michigan is in a “very strong position to make large investments that can transform the state and help Michigan families and small businesses recover from the pandemic.”
“The combination of the federal stimulus plan and the improving public health situation have set the stage for robust growth in Michigan,” State Treasurer Rachael Eubanks said. “The plan will jumpstart the economy by providing the support that small businesses need to recover and grow and by helping parents find the child care they need to get back to work.”
In the last year, Michigan has gone from a nearly $3 billion deficit to a $3.5 billion surplus, with a state budget that is primed for investment.
“Small business owners have been anchors of hope and support during covid,” said Milinda Ysasi, CEO of Grand Rapids Opportunities for Women. “As we work to restart our Michigan economy, it is important to center the lessons and lived experiences of our entrepreneurs. The success of small business owners is critical to an equitable and better normal.”
Alita Kelly, founder of South East Market and vice chair of the Grand Rapids Urban Agriculture Committee, said that, with 41% of Black businesses closing during the pandemic it’s “important now more than ever” to look at how the state can not only jumpstart the economy, but “reimagine the economy to be one that is equitable for everyone.”
“We can take this as an opportunity to be agile to incorporate diversity and sustainability into the core of how Michigan operates business,” Kelly said. “COVID required a lot of us to think on our feet in ways unimaginable but moving forward we can better prepare ourselves to be resilient in the face of the uncertainties that are sure to surface in our future.”
Last month, the U.S. Department of Labor released state and national unemployment figures. Michigan’s unemployment rate decreased to 4.9%, beating the national average of 6.1%.
Whitmer put forward the MI Bigger Paychecks proposal and reinforced the need for postsecondary opportunities, like the Michigan Reconnect and Futures For Frontliners program. By bumping pay and increasing educational and skills opportunities for workers, she said, the state can entice more people to get back into the workforce and increase the state’s labor force participation rate.
- MI Bigger Paychecks: Would utilize $300 million to encourage businesses to increase wages by offering grants to cover the difference between their current wage and $15 per hour. The grants would cover the first three months of this raise for workers if businesses commit to retain the employee and continue the $15-per-hour wage for at least three more months.
- Michigan Reconnect: Would provide $120 million to build on the successful, bipartisan Michigan Reconnect program to ensure a pathway to a better-paying job through a tuition-free credential, certificate, or associate’s degree for anyone 25 years or older. The Michigan Reconnect has already accepted more than 70,000 Michiganders.
- Futures For Frontliners: Would recognize the sacrifices frontline workers made through the pandemic to help keep the rest of the state going by providing them with tuition-free paths to earn a degree or certificate. The Futures For Frontliners program has already accepted more than 120,000 frontline Michigan workers.
Whitmer unveiled the Michigan Mainstreet Initiative, a $300 million investment to uplift small businesses. The plan would include $100 million towards restaurants and other place-based businesses to help them cover costs and meet payroll; $125 million for small businesses left out of other incentives and organizations that support them; and $75 million in grants for startups.
- Michigan Small Business Restart Program: Will invest $100 million to help restaurants and other place-based businesses cover costs by providing grants up to $20,000 for mortgage, rent, taxes, payroll, and other operating expenses. The plan will set aside $25 million for small businesses with less than 9 employees, which is over half of Michigan businesses and a high proportion of women and minority owned businesses.
- Michigan Microenterprise Support Initiative: Would invest $125 million to provide grants for businesses that did not qualify or apply for other incentives, like the federal Paycheck Protection Program. The plan would work with community development financial institutions to provide loans to rural businesses or other businesses with less than nine employees that struggled to access capital through traditional programs.
- The Michigan Small Business SmartZones and Business Accelerator and Resiliency Initiative: Would invest $75 million to provide grants to startups that can help our communities thrive. The plan would create the Small Business Support Network and Small Business Fund to support traditional commercial corridor/main street businesses and also provide opportunities for new businesses.
Lastly, Whitmer is proposing expanding Michigan’s Work Share and hiring a surge of Unemployment Insurance Agency staff to help Michiganders fulfill their work search requirements. The Work Share program, which was a tool used by employers to avoid laying off workers, can be used by businesses to bring on new employees to help them restart.
During the pandemic, Michigan’s work share program saved nearly 100,000 jobs. As the waiver on work search requirements for unemployment benefit recipients expires, Governor Whitmer is proposing hiring an additional 50 full-time staff to meet the expected surge in demand and help Michiganders fulfill their work search requirements.
In her executive budget recommendation, Whitmer proposed a $370 million investment to expand access to no-cost or low-cost child care for 150,000 more families. Right now, Michigan needs talent, and regardless of whether a child is 12 months or 12 years old, working parents can’t work without safe, quality, affordable child care. The governor’s plan would temporarily increase the income eligibility threshold from 150% to 200% of the federal poverty line, waive out-of-pocket copays through fiscal year 2022, and provide a 10 percent increase in hourly rates for child-care providers.