3. Job Creation Strategies
The year 2011 was about three things: jobs, jobs, and more jobs.
“Talking about jobs is at the top of most state leaders’ lists. It is driving the conversation,” said Mark White, vice president for research at the Center for Regional Economic Competitiveness.
Montana Gov. Brian Schweitzer said as much in his State of the State speech this year: “Please bring me … [b]ills that help businesses and create jobs and bills that prepare our students for a better tomorrow. I’ll sign them.”
In 2011, Schweitzer and other state leaders did everything they could to get residents back to work.
It is not an easy task. The U.S. has shed millions of jobs since the Great Recession began in 2007, and the unemployment rate remains stubbornly high. The pain has been felt sharply by some states. In August 2011, nine states reported unemployment rates of more than 10 percent; two states had rates of 9.9 percent. The national average stood at 9 percent in October, 2011.
States have used tax cuts and incentives to lure business investment in the past, but that is changing, according to White.
“The attitude is, ‘How do we do more with less?’ The incentive issue comes up a lot because some people wonder if that is wasteful or not,” he said. “Money is tight, and there is a lot of scrutiny on the big projects. States aren’t, for example, competing for the big auto assembly plants quite like they used to.”
Robert Tannenwald, former vice president of the Federal Reserve Bank of Boston and former senior fellow for the Center on Budget and Policy Priorities, spoke to this anxiety when he told CSG members in April that states should take a holistic approach to development, building human capital and infrastructure rather than providing tax incentives to particular firms.
“States trying to grow their economy should maintain vital public services, invest in infrastructure, keep their teachers in the classroom and provide excellent public universities and junior colleges,” Tannenwald said. “More than ever before, businesses seek locations with a suitably skilled workforce, universities sharing cutting-edge technology and infrastructure that is modern and reliable.”
It’s an idea that states like Georgia, for example, have applied. White calls the Georgia Work Ready program, as “a great example of a state addressing the jobs mismatch—a situation where workers are unemployed because they simply don’t have the skills to do the jobs that remain unfilled.” White described workforce mismatch as “a huge issue.”
“Georgia has been particularly successful because it has been able to sync up both supply on the workforce side and demand on the employer side around the Georgia Work Ready program,” White said It’s one of many innovative approaches states have taken to get more people working, especially as traditional measures like tax incentives and other resources for economic development have been scaled back.
With estimated budget gaps totaling $112 billion for the 2012 fiscal year, states are taking a hard look at how they attract businesses with limited resources.
Resources
