Liberal in the Land of Conservative

State Senator Tarryl Clark
Assistant Majority Leader
208 State Capitol, 75 Rev. Dr. Martin Luther King, Jr. Blvd., St. Paul, MN 55155-1606
E-mail: www.senate.mn/senatorclark
Phone: 651-296-6455
January 18, 2008

Clark: Minnesota’s recession is a call for change
Depressing new job figures from the Minnesota Department of Employment and Economic Development show that Minnesota’s seasonally-adjusted unemployment rate rose from 4.2 percent to 4.9 percent during 2007, a 15 percent increase. Minnesota lost 2,300 jobs in the month of December, capping off a six-month period that saw 23,000 jobs disappear from the state. On Tuesday, Electrolux in St. Cloud announced a temporary layoff of 190 employees, coming on the heels of layoffs from other Central Minnesota employers.

According to State Economist Tom Stinson, “Minnesota’s in a recession. I don’t see how you can label it anything else.”

According to Stinson, our state needs to add at least 23,000 a year just to keep up with growth in the labor market. Instead, there were 700 fewer jobs at the end of 2007 than there were at the end of 2006. Minnesota’s performance was worse than the rest of the nation. While we lost jobs in 2007, employment in the rest of the country actually grew slightly.Those are the numbers.

The real story is what it means in people's lives. Folks in the construction trades are really suffering right now. As one said, "Not just on wages, but on health care. We can't get medicine." Randy Flag, skilled electrician, says he has to leave his family and drive hundreds of miles out of the state to find work.

It’s clear now that Minnesota’s experiment with trickle-down economics has not produced the results that its backers promised. Minnesotans were promised that cutting taxes on the wealthy, along with cuts in services, would spur private investment and job growth.

Instead, tax burdens were shifted to the middle class as state aid for local schools, police and fire diminished and property taxes shot up to make up part of the difference. Transportation infrastructure—literally the backbone of economic sustainability—has deteriorated. Cuts in health insurance for working families and state policies that favored the insurance industry over the interests of doctors and patients have been a factor in rising heath care costs.

It’s time to change course. Minnesota’s economic woes can be effectively addressed. We should start by recognizing what worked for us when our state was a national economic leader and act to return to proven strategies for rebuilding long-term health to the state’s economy. We need smart investments in education and transportation infrastructure—they will incubate and sustain job growth. We need to rebuild and support a strong middle class by holding the line on property taxes and the growth of health care costs.

This is a long-term approach to building economic prosperity, but Minnesota also needs short-term help to ease the current economic emergency.

This week, State Economist Stinson told legislators attending a bipartisan seminar that to be effective, legislative action to provide short-term economic stimulus should follow “the three Ts”: Timely, Targeted and Temporary.

Following that principle, the State Legislature should send capital investment and comprehensive transportation funding legislation to the governor early on in the session. There are thousands of jobs in construction, engineering and design in those bills, and early action will allow many of those projects to move forward in time for the 2008 construction season.

Given how far Minnesota has fallen behind, rebuilding our economy won’t happen overnight. But we cannot afford to put off action any longer if we want to build a strong and prosperous Minnesota.