Governor’s job growth plan rests on five sound pillars
We wanted to pass on this informative and timely article from Growth and Justice:
By Dane Smith, president, Growth & Justice
When Gov. Mark Dayton took his 12-city jobs tour down to the scenic Mississippi valley in Winona last week, the local newspaper quoted the owner of Ed’s No Name Bar voicing his biggest concern.
And it wasn’t too much state government, taxes or regulation.
“It’s hard to find affordable [health insurance] plans for individuals,” Ed Hoffman said in the Winona Daily News article. “How can we make health insurance more available to small businesses?” (Check out Ed’s when you get a chance — it’s a very cool, arty place, more than just an ironically named tavern.)
Similarly, a few days earlier up in Fergus Falls, a meeting with 250 residents focused on worries that employers need better trained workers, and more, not less, funding for schools and technical training, as well as more investment in public infrastructure from roads and highways to high-speed Internet.
These are the kinds of needs in which our state government must invest. The object is not direct job creation, but rather to satisfy the “terms and conditions for strong private-sector investment,” as Dayton senior economic adviser Kathy Tunheim puts it.
And we do need a muscular, comprehensive new strategy for reducing unemployment and spurring job growth, which has badly lagged in Minnesota during a decade in which lower taxes and smaller government was the main strategy, or at least the most frequently sounded theme.
Dayton (who, in the early 1980s, was one of the state’s earliest commissioners of the department focused on economic development) and his team are still creating an overall plan. He properly has established job creation and retention as his top priority, promising to concentrate on that objective during the three-and-a-half years left in his current term. Although the rollout of the grand plan can be expected this fall, the outlines are becoming visible, and they are promising.
Commissioner Mark Phillips, an experienced business executive from northern Minnesota who heads Dayton’s Department of Employment and Economic Development (DEED), recently made a presentation sponsored by the Minnesota Council of Nonprofits in which he outlined five “buckets” on which the plan is likely to draw:
- Access to capital. By the end of this month, Phillips said, the administration hopes to have recommendations for ways to get more capital in the hands of viable mid-size and small businesses that want to borrow to expand, but simply can’t get the venture capital and other investments from jittery banks and other sources.
- Focus on exports. Minnesota’s unemployment rate is almost 2 full percentage points lower than the national average (7.2 percent vs. 9.1 percent) in large part because of surprisingly strong export strength, principally in manufacturing and agriculture, Phillips said. Gubernatorial trade missions to Malaysia, which may be interested in investing in our state’s bioscience industry, and other destinations, may be forthcoming.
- A competitiveness toolkit. Almost nobody, including the economic policy organization I lead, likes special deals, tax breaks and subsidies designed to lure companies from one place to another, or to build stadiums to prevent professional sports teams from leaving. But the fact, Phillips said, is that other states continue to play the special incentives game, and a state cannot unilaterally disarm. Recent legislation providing tax breaks for large data centers may result in an announcement soon of a new “mega data center,” he added. One can only hope that bold efforts to provide state support for universal health care in Minnesota, taking the load off of employers, might be part of this toolkit, or fit somewhere else in the development strategy.
- Workforce preparation for job demand. This is my personal favorite “bucket,” and that of many others, including business groups focused on long-term economic vitality. Nothing spells success like an ample supply of highly educated workers, and surveys consistently show this is our state’s strongest suit. The Minnesota FastTRAC program, a new and quicker way of producing many more degrees and credentials that match up with actual local private-sector needs, is “Recommendation 1” among 16 ideas in an impressive “All Hands on Deck” report released late last year. It is the work of the Governor’s Workforce Development Council, a blue-chip assemblage of business and community leaders, education officials and legislators, including some key figures from the Pawlenty administration.
- Infrastructure and technology investment. Traditional bonding bills and other public investments need to go forward for highways, transit, sewer and water, airports and the bricks-and-mortar for higher education. Phillips said the administration also is looking at ways to invest in the kinds of infrastructure that will produce more jobs in “green” energy, bioscience and life sciences, and medical technology.
This is a grown-up and eminently pragmatic strategy that actually has strong roots in the previous administration and a DEED that worked quietly and constructively on many fronts under Commissioner Dan McElroy to retain and grow business with all the tools that the public sector and government have to offer.
Dayton’s team, to its credit, seems to be eschewing ideology and populist rhetoric and putting a higher premium on tracking evidence of what really works to spur the growth of good jobs.
Tunheim, founder of a prominent communications firm by the same name, says “we’re coming out of a time when some said ‘just get government out of the way’ or ‘cut taxes.’ And the fact is, there is no correlation between laissez-faire policy and stronger economic vitality for our state. But we don’t have good data on all the things being proposed more progressively, either. We can’t be afraid of data.”
Fearless pragmatism. What a concept.
A version of this column originally appeared in the St. Paul Legal Ledger Capitol Report on Thursday, September 8, 2011.
Dane Smith is the president of Growth & Justice, a progressive public policy organization that promotes statewide economic growth for Minnesota through smarter public investments in human capital and infrastructure.
Reprinted with permission