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28.9.09

LA bribery strategy creating too many low paying jobs

Although it has brought many positive changes to Louisiana, the Gov. Bobby Jindal Administration always has carried a strange blind spot on the issue of economic development. Comments made to the Postsecondary Education Review Commission (finally) meeting only reinforces the eccentricity under Jindal’s watch.

There, Curt Eysink, executive director of the Louisiana Workforce Commission, testified that, in a sense, the state was producing too many baccalaureate college graduates because there weren’t enough jobs for them, while there didn’t seem to be enough graduates with associate degrees given the forecasted areas of jobs growth. This proved to be too much of a softball for the committee composed of many in the higher education industry with advanced degrees, which blithely informed him that if Louisiana economic development as such that those kinds of jobs were the ones being produced, it’s no wonder the current brain drain was occurring and it was a problem of economic development, not educational resource allocation.

This commission is to deal with higher education, but the larger question of economic development is related and perhaps more important. One commission member told of a homegrown Louisiana firm that felt it had to open a new office in North Carolina, full of high-paying jobs, because the state was graduating too few indigenous engineers. Recently, statistics came out showing that while the state’s population wasn’t changing too much, there was a significant net outflow of college-educated individuals and a net inflow of those without such degrees.

So, to solve for this, to create more higher-paying jobs that require baccalaureate and above kinds of education, you would think economic development policy in the state would focus on creating the conditions for business formation and attraction, such as lowering taxes, slashing regulation, and ensuring political interference is minimized, along with improvements in educational quality starting from kindergarten on up. And to some lesser degree these have taken place under Jindal.

But working at exact cross-purposes has been the bribery strategy started under previous governors which Jindal quizzically has expanded, where all sorts of monetary incentives are dangled to companies to locate operations in the state, to mask the warts of the more cumbersome business climate, tax structure, regulatory regime, and of subpar educational capacity. And guess which kinds of jobs largely are getting attracted when taxpayer money is dangled at them? Not the high tech, engineering, and the like, but plucking chickens and making car components that don’t even require a high school education, and not even often a degree from a technical school.

Which leads to the somewhat convoluted thinking that Jindal operatives seem to have on the state of postsecondary education. They have opined that the state needs more two-year degree graduates, but why isn’t this being done already? After all, when throwing together all of the technical and community colleges in the state together, Louisiana has the sixth most of any state (plus the District of Columbia) in the nation and in per capita terms is ranked third in number of higher education institutions per resident. Yet in terms of enrollment per institution, the state ranks 47th. The infrastructure is there and in fact may be part of the problem – too many such institutions diluting resources that make it more difficult to produce graduates while concentrating too much on enrollments.

In essence, it almost becomes a self-fulfilling prophecy. Economic development strategy disproportionately brings in jobs more associated with technical and associates’ degrees, producing the complaint that there aren’t enough students graduating with these. Meanwhile, some of those with baccalaureate degrees can’t find enough work and leave the state, decreasing the chances of the creation of more such jobs and reinforcing the trend and justification for the bribery economic development strategy that brings in disproportionately lower quality jobs.

In the short term, the bribery strategy and the growth strategy of cutting taxes, etc. both cost the state – the former in taxpayer dollars going out in subsidies, the latter in forgone revenues coming in – but the long term ends are starkly different. The bribery strategy perpetuates overweighing in less productive/valuable enterprises, while the growth strategy sets the stage for disproportionately higher-productivity/value employment abounding. However, results for the latter take longer than those of the former to show up.

Perhaps that is why Jindal has been suckered into so much emphasis on the bribery strategy, because it can produce (disproportionately inferior) jobs more quickly, while with the growth strategy it may take considerably longer for the higher-quality jobs to surface although they will bring with them a number of, perhaps in absolute terms even greater amounts of them than with the bribery strategy, the lower-paying jobs as well. Even a decade can be a political lifetime, so expediency may encourage chasing job growth which manifests in a couple of years rather than which takes longer.

If this is what is driving the puzzling Jindal fixation on dangling incentives, he needs to get out from under the spell of those selling him this pap and understand that best addressing the long term economic interests of the state involves moving away from the legal bribery of business by government. And that means that baccalaureate holders graduated in-state are not, in policy terms, seen as something to be dealt with, but instead integrated as a resource into a strategy to produce superior jobs and economic growth.

2 comments:

Padmanaban said...

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