Wieffering: The best plan to boost jobs: Invest in workers

  • Article by: ERIC WIEFFERING , Star Tribune
  • Updated: October 25, 2011 - 9:09 PM

It seemed fitting that the co-author of a depressing bestseller about America's economic decline would deliver the keynote speech at Gov. Mark Dayton's daylong conference about Minnesota's broken down jobs engine.

"That Used to Be Us" is the name of Michael Mandelbaum's book. It could serve as a catchy, albeit rueful, Minnesota economic theme song.

In the 1990s, Minnesota's economy added 425,681 net new jobs -- one of the highest rates of job creation in the country. Since 2000, the state has seen the net addition of 80,767 jobs.

What the heck happened?

Tuesday's conference, which drew more than 700 people, was an attempt to answer that question and plot a course for the future. We heard about too little money for start-up companies, too much government red tape, taxes that are too high and workers that don't have the right skills.

Pat yourself on the back if this litany of complaints has a familiar ring. They are the same ones offered up in good times and bad. Even if true, they are an inadequate prescription for curing what ails Minnesota's economy.

Government can't create private-sector jobs; it can only create an environment in which the private sector can flourish. A fair but competitive tax climate is important, but nothing is more critical than a well-educated, quality workforce. And the only way you get that is through strategic, long-term investment in education.

Here, instead, is what we have in Minnesota: A byzantine and broken kindergarten-through-12 school funding mechanism that has taxpayers coughing up more for worse outcomes. A conscious decision to choke off state funding of higher education, meaning tuition increases that force students to take on too much debt or forgo a degree altogether.

This isn't a uniquely Minnesota story. The same scenario has played out across the country. But the consequences for Minnesota have been especially dire.

Through much of the '80s and all of the '90s, Minnesota led the nation or was very near the top in job growth, venture capital financing and personal income growth. Minnesota's unemployment rate was under 5 percent for 10 years ending in 2003. For half that time it was under 4 percent and for 31 months it was less than 3 percent.

Good luck? Sure, some. Minnesota's economy does not exist in a bubble, and everyone did better in the '90s.

But you could also make a reasonable argument that Minnesota's outsized performance was the payoff for decades of investment in education. It probably partly explains why our September unemployment rate, at 6.9 percent, was better than the national rate of 9.1 percent.

But we need to do more than simply harvest the investments of the past. Rising dropout rates and a yawning achievement gap between white students and students of color leave us ill-prepared for a future that will include increasingly global competition and a permanent decline or departure of low-skilled manufacturing jobs.

Margaret Kelliher, the executive director of the Minnesota High Tech Association, spelled out the facts for one group of conference attendees. Currently, less than 50 percent of Minnesota's workforce has a two- or four-year degree; 70 percent of the jobs projected to be available in 2018 will require one.

A state survey of more than 500 manufacturers released Monday, for example, found many reporting open positions that they are unable to fill.

You always have to take these reports with some degree of salt. The companies reporting the most job openings are in parts of the state where median wage rates are among the lowest in the state. "Just because you can't find a new truck for $10,000 doesn't mean there's a shortage of trucks," said Kris Jacobs, executive director of the advocacy group JobsNow Coalition.

Still, the findings highlight a troubling gap between the skills employers need and the ones available. The wider that gap gets, the dimmer our future will look.

ericw@startribune.com • 612-673-1736

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