State must develop skilled workforce For those contending with it, unemployment is scary and terribly disruptive. So unemployed people and their families will find little consolation in the data showing that the St. Cloud region's unemployment rate -- 4.8 percent in December -- was lower than much of greater Minnesota's rate, which in turn was lower than the national rate.
The larger problem facing the region is wage levels.
In 2002, based on data from the Jobs Now Coalition, 36 percent of the area's workers did not earn the $10.75 an hour that was required to support two young children at a basic-needs level even with two parents working full time. A whopping 68 percent of workers did not earn the $16.83 an hour that a single parent would need to support those two kids.
The problem is worse than in the Twin Cities, because while living costs are 14 percent lower in the St. Cloud area, median wages are 27 percent less.
In other words, for every unemployed person in the region, there were perhaps 10 workers not earning a family-supporting wage.
Many of the forces driving this are national (and international) in scope, and require federal action. So what can Minnesota and the St. Cloud region do to increase the number of people earning enough to support a family?
Growth & Justice, a nonpartisan think tank on Minnesota economic issues, has studied the question for most of the past year and discussed it at roundtable meetings statewide, including two in St. Cloud.
Our conclusion: Education and skills of the work force is the most effective tactic and one that unifies people who are often at odds because of other policy choices.
Not only do people with more education and skill earn substantially more, but the states and cities that have more educated workers grow faster and stronger than those that don't.
Many studies have shown that the benefits spill over to the whole community, not just those who gain the education and skill. That's because firms in regions with stronger work forces get more productive, and firms in higher-wage industries look to locate or expand where the quality work force resides.
The Twin Cities economy has strongly outperformed most metros because of its education and skill levels. St. Cloud has the advantage of being close enough to that magnet to benefit from it, but it needs to put more emphasis on work force development -- and push the state to do so.
Only 17 percent of adults older than 25 in the Central region have bachelor's degrees, well below the statewide average of 30 percent. Only 24 percent have at least two-year college degrees, compared with 35 percent for the state. The numbers are higher in the St. Cloud metro area but still below the state average. St. Cloud is blessed with a good state university, but it needs to get more people in the region to take advantage of it. That requires pushing the state to invest more in helping people attend -- especially young people from lower-income families and working people who need help with tuition and child care. Some welfare recipients should be assisted to go to college. Maine has proved that this can be extremely beneficial to the state.
For many people, the path up the wage ladder does not require a degree --just an investment in giving them skills the market demands. In the Twin Cities, a number of nonprofit organizations have demonstrated that through intensive training, they can enable low-skilled, low-wage workers to get jobs paying as much as $5 an hour more than they could earn before.
St. Cloud, unfortunately, does not have a lot of these kinds of programs. But if the state substantially increased its financial support for such training, on a pay-for-results basis, it might become a viable activity for nonprofits in the area. The return on investment would be high.
One training initiative that we know works well is the state's Job Skills Partnership Program. A recent example in the area was the $100,000 award last year to St. Cloud State University to train 680 Electrolux workers in various process and manufacturing skills that the company identified as necessary for their success.
Unfortunately, state funding for the Jobs Skills Partnership was cut by more than half in last year's budget bloodbath.
Many other factors, of course, contribute to how well a local economy fares and how much its workers earn. But the one the state and local regions can influence, and that has a proven track record of success, is work force quality. Business, labor and the public should all unite around making it our top economic development priority.
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