Can California Learn Anything from Minnesota?

The simplest and most effective solution to California’s economic slump is to create more jobs. When people have jobs, they spend more money on goods and services and they pay more in taxes. Jobs are what it’s all about.

California has lost 1.3 million jobs since the economy began to sputter three years ago. Those jobs need to be resuscitated in order for the economy to began humming again. But who is going to create them? And, when?

Gov. Jerry Brown believes it will be 2016 before California businesses add 1.3 million jobs to their payrolls. He could be underestimating the power of the state to generate jobs, but it still is likely we’ll have at least two or three rough years ahead of us.

The trouble is big businesses aren’t going to rush out to hire people like they have done in every California economic rebound for the past 60 years. Maybe that doesn’t matter. Everyone knows that new businesses and small businesses are the ones which create most of the new jobs today anyway.

But you don’t see a lot of people running around creating new companies these days. That’s because most new businesses require a capital investment and money is very tight. Even those who have the money to start new ventures are waiting for signs that the economy has reversed gears and is headed forward again.

So how do we jumpstart this current economy?

Take a look at what the state of Minnesota plans to do about its economic woes. Minnesota has about 206,000 unemployed people today and a jobless rate of 7 percent. Governor Mark Dayton has proposed spending $1 billion on infrastructure and other needs as a way of putting an estimated 28,000 people back on payrolls.

Dayton announced that he has come up with about $530 million in construction projects he’d like to see completed, leaving another $470 million for the state’s Legislature to identify projects the legislators feel are necessary.

This is an important tactic. Giving the Legislature the power to choose its own projects is a buy-in that nearly assures Dayton will be successful in his effort. If Minnesota handles this correctly, it can reduce its unemployment rate down to about 5 percent, strengthening its overall economy.

The nice thing about a tactic like this is that Minnesota will be creating good-paying construction jobs. It is not creating $10 an hour jobs.

Of course, you need to find that up-front investment to make something like this work. And, California’s economy would barely inch forward by adding 28,000 jobs. The state currently has 2.27 million people out of work, or about 12.5 percent of its work force.

Economists agree that adding jobs is a sure-fire fix for a troubled economy. It’s up to us to figure out how we can create those jobs and help accellerate California’s recovery.