Don’t reinvent the wheel to create new jobs

Published 8:58 am Tuesday, December 9, 2008

This isn’t the first time a serious national economic downturn has threatened Minnesota’s economic future.

In 1983, facing our highest unemployment and the worst economic downturn since the Great Depression Governor Rudy Perpich responded with the Minnesota Emergency Employment Development Act, an innovative plan to create new jobs for Minnesota workers.

The MEED program worked like this. Employers were given a six-month, $4 per hour subsidy for every new job they created for Minnesotans who were out of work. If the employee stayed on the job for more than 18 months, the employer never had to reimburse the state. The program exceeded expectations and was a critical element in the economic recovery, creating more than 21,000 permanent unsubsidized jobs.

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Fast-forward 25 years. Minnesota is again faced with rising unemployment and a struggling economy. Just last month we learned of 7,500 more lost jobs and most economists believe it could get worse. We must approach our current situation with the same innovation and sense of urgency in which Perpich identified the core problem we must address — jobs for Minnesotans.

The MEED Act injected $70 million to put Minnesotans back to work, that would be about $153 million today. Governor Pawlenty has recently announced part of his plan to boost our economy, and it doesn’t come close to the kind of job creation investment Perpich made in 1983. Pawlenty’s plan relies on tax incentives to companies that create green jobs. Renewable energy and other green jobs can play a role in boosting our economy, but the Governor’s plan is narrow, inadequate, and most of all, inefficient at accomplishing our most important task — new jobs for Minnesotans right away.

Pawlenty has also talked about corporate tax cuts as a job creator. Now is not the time to cut tax rates for corporations and then cross our fingers and hope it will mean more jobs for middle class wage earners. It is the same Bush/Pawlenty tax policy that has given billions in tax breaks to the richest Minnesotans and forced everyone else to pay through the nose in higher property taxes and fee increases and it certainly hasn’t created new jobs.

Our looming budget deficit and economic woes will have some people saying that now is not the time to try anything new. But I guarantee none of those people have seen their job of over a decade suddenly disappear like over 25,000 Minnesotans have seen in the last year alone.

In every corner of the state, Minnesotans are watching and waiting for bold action from their leaders to turn things around. We must embrace the significance of the task ahead and start discussing new, creative ideas that can put Minnesotans back to work as soon as possible. That’s what we did more than 25 years ago, and an updated version of the successful MEED Act is a good place to begin our discussion when the Minnesota State Legislature convenes this January.

Rep. Tom Rukavina, DFL-Virginia, is chairman of the House of Representatives Higher Education and Work Force Development Committee.