Sunday, November 19, 2006

Southern Illinois Economic Development a quote from Milton Friedman?

On Jobs
Proposed economic policies tend to be judged in terms of jobs "created." That is the wrong criterion. The economic problem is not creating jobs. That is easy: Hire people at minimum wages (or lower) to dig holes and fill them. True, raising taxes to finance that project would destroy jobs, but the jobs destroyed would be high-wage jobs, the jobs created low-wage jobs, so for each job destroyed more than one job would be created--a net gain of jobs.

The real problem is to establish an economic environment in which there is a demand for workers at wages that those workers not only regard as satisfactory, but are qualified to earn: Better qualified workers and better wages--not simply more jobs--is the real problem.
--from "Better Workers, Better Wages: The Real Issue," June 1, 1993

When I look at Southern Illinois economic development this pretty much sums it up. In particular this is what I see in Marion and their tax incentive based method of attracting jobs. Also, any program involving the State of Illinois seem to be more about driving state soft money then real, good jobs.

This has been the one big problem I have had trying to doing economic development here. Carbondale/Southern Illinois based businesses seem to have completely given up, we take fairly high quality new college grads and under pay them. Everyone knows they are going to stay for a short time and move on, then the cycle starts again. This guarantees that you never develop an educated local workforce of experienced people. Owners never get good employees, both because they lose everyone who was good to better paying jobs, also there is no shared ownership (via stock) and no wealth creation through the ranks that might make the local environment bloom.

The funny thing is that our method is pretty much exactly the opposite of the areas that are doing well economically. To much short term thinking has lead us to where we are now, not enough of an educated and motivated workforce to build the high growth and high pay companies the area really needs.

Thanks to Todd for sending me the link.


Anonymous said...

EXACTLY! "why should [a business] hire someone and ay them a decent wage for years when they can churn through all these kids fresh out of SIU who are willing to work cheap, and very hard for experience?"

Peter in Carbondale said...

I guess you should hire someone and keep them because it works better then running through new college grads over and over.

Mike said...

This seems to be the case in the majority of the state, other than possibly Chicago, for college grads. Even if we like the area we're already living in, there's pressure to move out of state because there are too few good job markets. So we move east coast or west coast, and Illinois as a whole suffers from lack of motivation and inovation. Such is life.