MEED Open Letter

March 19, 2009

AN OPEN LETTER TO THE HIGHER EDUCATION AND WORKFORCE COMMITTEE

Dear Members,

The economic crisis deepens while bailouts, credit market fixes, industry rescue packages, and the federal stimulus efforts swirl around us.  Ultimately, the measure that hits home is the unemployment rate – how many jobs we are losing and how many people are losing jobs.  And so whatever the recovery strategy – the ultimate end product has to be jobs.

Minnesota has a unique and proven approach to solving the problem of getting people back to work: an emergency jobs strategy in which every dollar going to employers is used for wages to hire out-of-work Minnesotans.   

While the national government emphasizes infrastructure construction and reconstruction, a growing coalition in Minnesota is working to modernize a jobs program that the Minnesota Legislature funded during the last period of deep unemployment in the 1980s. The Minnesota Emergency Employment Development (MEED) program put 42,000 Minnesotans to work over three years in the mid-1980s. The Legislative Auditor pronounced the $3 gained for the taxpayers out of every state dollar spent as setting a new standard for wise use of public monies.

We propose a Minnesota Emergency Jobs Act, a muscular wage-subsidy program that entices nervous employers to go ahead and hire. A majority of the jobs would be in the private sector. Workers will be encouraged to upgrade skills either through full-time training, part-time training or on-the-job training, and all participants will be required to have a plan to upgrade their skills while working.  The Emergency Jobs Act would offer unemployed Minnesotans an opportunity to be re-employed in tasks that are needed by the larger economy while not letting their useful recent work skills erode.  To make the Emergency Jobs program reality this time around will require a combination of federal funds and state expertise.

Funding an Emergency Jobs Act is doubly important now as the federal government puts together a stimulus package to put life back into our economy.  Many good proposals look like they will be candidates for the federal bill – including creating jobs through public infrastructure projects.  But a complete jobs package needs to reach small and medium-sized private sector businesses and needs to reach Minnesotans who may not end up working in construction.  

The potential to make a difference is great.  Thousands of Minnesotans are out of work.  This Minnesota Emergency Jobs Act proclaims that $100 million be spent on putting nearly 6,000 unemployed Minnesota workers to work in the next 18 months – at a cost of $14,000-$15,000 a job, less than the $25,000 a job projected for the equally important infrastructure jobs.   Most of the funds would be spent on a wage subsidy that would travel with the worker and be available to a very wide array of Minnesota employers.  

Many of the jobs envisioned in the Emergency Jobs Act would benefit people whose skills and experience are not well suited to the industries that will benefit from new infrastructure spending.  Many are displaced from industries that are no longer profitable.  These potential employees need and want to work for the betterment of their families and communities.  Wage subsidies make this possible.

Minnesota and Minnesota’s local employment services providers have deep experience in operating wage subsidy programs. Administratively, it was a simple, rapid response. Businesses were better able to weather the downturn. Emergency jobs gave a jump start to that era’s economic recovery and could do so again.

People everywhere are frightened by the job loss numbers.  There is hope if the right programs are put in place to serve persons who want and need to work.

Let Minnesota lead the way. We’ve done it often before and we can do it again.

Sincerely,

JOINT RELIGIOUS LEGISLATIVE COALITION
Brian A. Rusche, Executive Director