Minnesota experience may offer solution for jobless recovery

Published on People’s World, by Barb Kucera, November 27 2009.

MINNEAPOLIS (PAI) – When Democratic President Barack Obama convenes a White House forum Dec. 3 to consider ways to create jobs, he should ponder a program that worked successfully for Minnesota in the 1980s, a noted labor economist says.

The Minnesota Emergency Employment Development program, known by its acronym, MEED, was in place from 1983-1989. About 45,000 people enrolled in the program, which provided a wage subsidy of up to $4 per hour ($10 in 2008 dollars) for employers to hire new workers, many of whom were low-skilled or among the long-term unemployed.

Following their MEED experience, more than 20,000 of those workers succeeded in staying on with their employer or finding other permanent, unsubsidized employment, according to a report by the Corporation for Enterprise Development …

… By the 10th year of the program, MEED actually makes money for the government, Bartik added. “This program keeps on increasing employment year after year,” Bartik said. “The bottom line argument for this program is that it works.”

Jim Glowacki couldn’t agree more. Twenty-five years ago, he was struggling to start his own business on the recession-wracked Iron Range in far northern Minnesota. With the help of MEED, he hired his first employee. Today JPG Communications has several offices and employs 20 fulltime staff. “From an employer’s perspective, the program helped share the risk,” Glowacki said. “Today I would strongly support the program.” Two Minnesota state Democratic legislators want to resurrect MEED.

For a program like MEED to succeed on a national scale, the federal government would need to spend $30 billion to create 1 million job slots with a wage subsidy of $10 per hour, Bartik said. If continued for 10 years, nearly 2.3 million jobs would be created in the final year, with the cost dropping from $33,541 per job to $13,056.

Bartik said he did not know if Obama will consider wage subsidy programs when making job creation proposals to Congress. “Now is the time for people to make the case” for programs like MEED, he said. (full text).

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