Stateline Story

Election 2004: How to Look Beyond the Campaign Rhetoric on Jobs Creation

  • September 20, 2004
  • By Raymond C. Scheppach

The current debate between President Bush and Sen. John Kerry over job creation is echoed in this year's governors' races in a pattern as predictable as the election calendar. Yet, despite all the charges and counter-charges, the fact is neither the president nor a governor really has much impact on job growth during their four-year terms. Cyclical changes in the economy and their effect on specific industries -- not a chief executive's changes in policy -- are primarily responsible for short-run changes.

Though accuracy and honesty are sometimes the first casualties of bruising election battles, it's still important for candidates to reflect a more accurate and honest political debate over job creation. With this in mind, presidential and gubernatorial candidates should focus on their long-run economic strategies because this is where federal and state policies are critical to creating good, high-paying and stable jobs.

At the state level, it is critical to design and implement two strategies for sustained growth and job creation. First, to compete in today's high-tech global marketplace, we must have the best-educated and most highly trained workers in the world. Second, states must build strong "clusters of innovation" to drive job creation and attract employers.

These two long-run job creation strategies are not independent, but rather should be complimentary. For example, in enhancing the education and training of the labor force, it is critical to ensure that it is tied to labor force needs of existing clusters in the state.

To meet this challenge, we must modernize our education system because too many of our schools are not graduating students ready to compete in today's global economy. Given that 30 percent of the average state budget, or $150 billion nationally, is committed to elementary, secondary, and higher education, taxpayers should demand a high rate of return on their investment.

Mandatory and comprehensive assessment and accountability systems for students and teachers, faculty members, and school administrators need to be rigorous. Coupled with appropriate teacher training, pay for performance must be an integral part of the system. Funding levels need to be adequate and strategically allocated between pre-school, elementary and secondary, higher education and vocational training. These systems must be in place for college-bound students and for those students who will go directly into the work place from high school

The effectiveness of a "clusters of innovation" strategy depends on how states exploit their unique economic advantages and strengths. A cluster is a unique group of competing and cooperating companies, suppliers, service providers and research institutions that share specialized labor markets and services. These clusters are often the drivers of a state's economy since they grow rapidly as their products are exported from the region.

There are flourishing examples of biotechnology clusters in San Diego and the Research Triangle in Raleigh-Durham, N.C., and high-technology clusters in Northern Virginia and the Silicon Valley. However, every state has numerous smaller, lesser-known clusters that are crucial pockets of economic growth for the state. For example, northeast Ohio sports one of the nation's foremost polymer clusters, and in Mississippi, there is an upholstered furniture cluster that accounts for hundreds of high-skilled and well-paid jobs.

States must recognize they cannot create clusters, but they can assist in their development through progressive, business-friendly state policies. For example, states can target infrastructure, or more importantly, research and development spending, to assist their burgeoning clusters. They should also make sure their local community colleges and state universities offer degree specializations tailored to the cluster. States can collect and publish information on the cluster, provide technical assistance and perhaps even restructure some state agencies to work with the cluster's business leaders. They can provide grants to multi-firm groups, also stimulating collaboration. Finally, governors can assist by convening an advisory group of all key institutions in the cluster to strengthen networking and associate behavior.

So as the political rhetoric over jobs heats up this election cycle, it is fine for political campaigns to tout the latest jobs report or unemployment statistics. But voters should focus on the effectiveness of the long-run strategies being discussed and proposed during the campaign, for it is here where the future lies.

Raymond C. Scheppach, Ph.D., is the executive director of the National Governors Association. The views expressed here are those of the author and do not necessarily represent those of the NGA.