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A job-creation strategy that works

Sen. John Marty

Politicians talk incessantly about creating jobs. Unfortunately, most of the proposals for doing so, whether cutting taxes and spending (allegedly creating private-sector jobs), or the alternative of subsidizing private business projects, simply don’t help.

Remember how the Bush tax cuts for the wealthy were going to stimulate private-sector jobs? It didn’t work.

Across the country, the push to cut government spending results in tens of thousands of laid-off teachers, firefighters, road-maintenance workers, and other public employees. During the painfully slow recovery from the recession, it is not uncommon to hear economic reports about a gain in private-sector jobs being offset by a decrease in public-sector ones. Many politicians seem to wonder why employment levels remain stagnant, even as they vote to lay off more public servants.

Public subsidies for private businesses are no more effective. Instead of creating new jobs, these subsidies largely replace private investment with public money. As a result, these expensive projects net few jobs, and taxpayer money goes primarily for the benefit of wealthy business owners. Private investors gladly hang on to their money when they can lobby politicians to make taxpayers foot the bill.

A worker contributes

There is a better answer. It starts with an honest recognition that a worker, whether employed by a public school or a private accounting firm, contributes to the economy — by doing productive work, supporting their family, buying goods and services, and paying taxes. Laying off public employees to shrink government spending so we can provide tax cuts, in the hope that this will create private-sector jobs, is foolish. History shows that the economy doesn’t work that way.

The reality is that if we use public funds to address public needs, we create jobs. This holds true for public employees, such as teachers, hired to meet the educational needs of society. Likewise, when we address public-infrastructure needs, we create construction jobs. Certainly there is great need. Investments in Minnesota’s infrastructure have been inadequate, and the state has an enormous backlog of unmet maintenance and repair of existing facilities.

During the Great Depression, the federal government wisely addressed high unemployment by building public infrastructure, putting jobless workers to the task of constructing roads, bridges, schools, parks and recreational facilities, courthouses, hospitals, dams and sewage treatment plants.

We still see the results

The Civilian Conservation Corps (CCC) and Works Progress Administration (WPA) showed what could be done when we have the political will. In 1938, the WPA provided jobs for 3 million unemployed Americans. Seventy years later we still see the results of their work at countless places such as Minnehaha Falls Park in Minneapolis. We have not made that kind of investment in our public infrastructure since those days when we could least afford to do so.

Minnesota could learn from history. Making these investments at this time of low interest rates and high unemployment would cost less now than in the future, and it would stimulate the state economy and put thousands of construction workers back to work.

Earlier this year, I introduced Senate File 2619 to address our growing infrastructure needs. Currently, there are $350 million worth of unmet rehabilitation and maintenance needs in public housing for seniors and low-income Minnesotans. The failure to properly maintain this housing will cost more in the future if the buildings deteriorate to the point where they need to be demolished and replaced.

Higher-ed infrastructure needs

Our schools and higher-education institutions also have great infrastructure needs. The University of Minnesota currently has $900 million in deferred maintenance and asset preservation projects, and the Minnesota State Colleges and Universities (MnSCU) have a backlog of at least $300 million. Senate File 2619 would provide the funds to address those needs now, when the interest rates and other costs are lower and construction workers are seeking work.

For job creation, government subsidies of private businesses have been a failure. Likewise, huge tax cuts for the wealthy have resulted in layoffs of teachers and other public employees — reducing, not creating, jobs.

There are so many people looking for work, and so many tasks to be done; let’s put the two together. As we could learn from the 1930s, now is a great time to start.

John Marty, DFL-Roseville, is a state senator. He first published this article in his newsletter, “To the Point!” which is published by the Apple Pie Alliance

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Comments (6)

  1. Submitted by rolf westgard on 08/07/2012 - 06:58 am.

    Government is not the problem

    In addition to the jobs from all the useful direct government programs that Sen Marty mentions, government supported research has been the foundation of numerous growth industries like computers, communications, the internet, pharmaceuticals, aircraft, nuclear energy, etc. That process continues in government labs, and in supported research in nearly all this nation’s universities. Government is an important partner to business as we compete in a very competitive world.

  2. Submitted by Richard Schulze on 08/07/2012 - 07:47 am.

    On the other hand, you could sell the (fixed rate) bonds to pay for the infrastructure now, while rates are low. Even if you can’t get the actual work started for a year or two. That doesn’t stimulate the economy with immediate hiring. But it does address the need to get infrastructure worked on by getting the funding in place.

  3. Submitted by Rich Crose on 08/07/2012 - 08:27 am.

    Hiawatha Line Example

    The Hiawatha light rail line cost $750 million to build but has created over $2 billion in private construction along the route. Yet building the Southwest corridor cannot get approved by the “cut big government” forces at the capital.

  4. Submitted by Dennis Tester on 08/07/2012 - 03:08 pm.

    Anybody who’s tried to navigate this town

    knows there’s no shortage of construction jobs underway. The streets in my neighborhood including in front of my own house haven’t been usable for months. Bridges, highways, train rails, sewer and water lines … good grief, I’ve never seen so much construction in and around the area. It would be difficult to add any more.

    • Submitted by Richard Schulze on 08/07/2012 - 04:01 pm.

      Inaction is absurd and embarrassing, especially since funding is the primary (though not the only) source of disagreement and the costs of borrowing and unemployment (and the likelihood of a decent return on infrastructure investment) indicate that just borrowing the money to spend on new roads and rails would be a reasonable course of action. If ever there should have been a policy so obviously sensible as to attract bipartisan support, more money for infrastructure was it. Right now, when it comes to partisan politics, sensibility’s got nothing to do with it.

  5. Submitted by jody rooney on 08/07/2012 - 03:36 pm.

    Mr. Tester there are two construction sectors

    There is the highway and heavy and the building construction sector. Highway and heavy is what you see working what you don’t see is the building construction trades. Not a lot of plumbers and electricians on highway and heavy.

    Starting to repair public subsidized buildings is a good next step.

    Advancing rail transit has been delayed to long.

    It is time to move that backlog of projects forward.

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