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.
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.
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 of 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 is $350 million in 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.
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 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.
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