What States Can and Can’t Do To Create Jobs

Speaking of warfare, someone supposedly said “amateurs discuss tactics; experts discuss logistics.” A recent article in the National Conference of State Legislatures’ State Legislatures suggests a corollary economic development saying: amateurs chase smokestacks; experts improve the infrastructure—physical and human.

Smokestack chasing doesn’t help the nation, the article states. “Always controversial, such efforts not only have become more spendthrift than ever before, but are also damaging to the national economy since they merely shift employment and do nothing to create new jobs for the nation as a whole.” Using a military metaphor, Jon Shure of the Center on Budget and Policy Priorities stated,

Many states still feel that, by offering lower taxes and higher subsidies, they can grow their economies. It is not a long term-strategy, but states still do it. And companies still play states off against each other, asking for the best deal and then leaving when they get a better one someplace else. It’s a sucker’s game for states…

But there are viable options, the article points out. These include:

• Helping companies improve their workers’ skills and breaking into foreign markets.
• Fostering economic growth by expediting development permits and vendor payments.
• Paying partial unemployment benefits to those working reduced hours, thereby simultaneously lowering the unemployment rate and helping workers maintain their skills.
• Not laying off government workers.

The other thing states can do is to meld liberal and conservative ideas into viable policy options. “Liberals can take comfort that smart investments in education, research and general infrastructure are important. Conservatives can relish that efforts to eliminate needless regulations and counterproductive tax policies can help.”