"Cash for Jobs" is U.S. Sen. Al Franken's plan to put Minnesotans back to work.
National unemployment is greater than 10 percent with Minnesota not far behind. High and lingering unemployment is clearly an issue in Northeastern Minnesota where several cities on the Iron Range have unemployment rates exceeding 10 percent. We need Washington to pass a bill that puts Minnesota back to work as quickly and efficiently as possible -- and that's what Sen. Franken has proposed.
"Cash for Jobs" would create jobs in the private sector by targeting small and medium-sized businesses that are looking to grow but that are unable to make hires necessary because of the economy. The legislation could provide immediate assistance to small businesses with a hiring incentive.
This is help for Main Street, and Main Street would feel the relief right away.
One of the strongest points of the senator's plan is it would create jobs without adding to our national debt. It would use existing TARP funds, redirecting them where they could do the most good: job creation.
ADVERTISEMENT
In addition, "Cash for Jobs" is based on the Minnesota Emergency Employment Development program, which was wildly successful in the 1980s, helping Minnesota businesses put thousands of Minnesota workers back on the job. "Cash for Jobs" would use Minnesota's existing infrastructure, our Workforce Center System. That means the initiative would create no new bureaucracy, and the money would get to employers faster.
The plan could put around 15,000 Minnesotans to work for the next 15 months. And because of the way the plan is structured, many of their jobs likely would become permanent. Because the money is targeted at small businesses looking to expand, it's more likely the additional hire would be part of a permanent plan for growth. Also, the way the wage subsidies would be structured would mean the employer must be willing to pay the worker's wages for at least three months in order to get 12 months of government assistance. Finally, the program that "Cash for Jobs" is based on created permanent jobs that benefitted Minnesota workers and Minnesota's economy.
I had an opportunity to work with the Minnesota Emergency Employment Development wage-subsidy program in the 1980s and found it to be effective in creating new job opportunities very quickly. Many employers found the wage subsidy ($4 per hour for 1,040 hours) sufficient incentive to take a chance on expanding their businesses and opening new jobs.
These new jobs created real, long-term opportunities for the unemployed desperately looking for work. It helped hundreds of unemployed individuals and families get back on track financially and emotionally. And it reduced government expenditures for unemployment, insurance and public-assistance programs.
The Minnesota Emergency Employment Development program wages paid to the new workers were immediately spent, putting money very quickly and efficiently into the community, boosting local economies. This wage-
subsidy investment quickly touched a lot of hands and a lot of lives. And because the jobs were designed to be permanent, the benefits were felt long after the end of the subsidy period.
An economic recovery appears under way, but as with past recessions, the jobs portion of the recovery is lagging. Sen. Franken's jobs proposal is an opportunity to speed job recovery. This very simple concept of investing in small businesses to create jobs is an idea that I, and that we at the Arrowhead Economic Opportunity Agency, fully endorse.
Paul Carlson of Virginia is director of employment and training for the Arrowhead Economic Opportunity Agency.
