Blunt: Policy brought job growth

Government can create a good business climate, but claims of credit for increased employment as a direct result of government action are hard to support, a Southeast Missouri State University economist said Tuesday.

Since Gov. Matt Blunt took office, Missouri employment figures show that 93,300 more people have jobs. In a news conference Tuesday with reporters from Southeast Missouri, Blunt touted his administration's efforts to overhaul workers' compensation laws, economic development programs and limit lawsuit awards as major components of job growth.

"We welcome virtually all employers, and we have been solid in terms of job growth," Blunt said.

But claiming the jobs are the result of policy changes as opposed to a reaction to the ups and downs of the business cycle is a difficult case to make, said Bruce Domazlicky, a professor of economics and finance.

"When you talk about targeted tax breaks for a specific project, such as tax increment financing for a particular commercial development, you can reasonably say government had a hand," Domazlicky said. "But if it is a climate amenable to job creation, to say that government was responsible is a bit of a stretch."

Domazlicky doesn't dispute Blunt's description of his policies as business-friendly. "But it is ultimately up to the private sector to create those jobs."

Domazlicky also cautioned against giving too much credence to job reports for a single month. "They are always subject to later revision, and it is dangerous to look to month-to-month changes and say the economy is doing great."

Blunt's comparison looks at the seasonably adjusted figures for March that show 2.8 million Missourians held jobs and compares them to the figure for January 2005, when 2.71 million Missourians were working. The 2005 figure is during the transition from the administration of Gov. Bob Holden, a Democrat who presided over an economy that contracted sharply over four years and left Missouri's tax coffers empty.

The similar period of Holden's administration showed a loss of 63,400 jobs. Going further back to the same time period from 1997 to 1999 during the second term of the late Gov. Mel Carnahan showed that Missouri gained 102,300 jobs.

All the figures are from the U.S. Department of Labor's Bureau of Labor Statistics.

The Missouri Department of Economic Development, through the Missouri Economic Research and Information Center, details which industries are growing and which are shrinking. Manufacturers cut 4,700 jobs under Blunt, while education and health care added 22,100 jobs and the leisure and hospitality industries added 18,200 workers.

"Manufacturing is an area of tremendous challenge," Blunt said.

Closer to home, the same economic forces have seen some local manufacturers, such as Dana Corp., reduce their work force or shut down while service-oriented businesses, such as the National Asset Recovery Service Inc. call center, are moving into the area.

The job of government, Blunt said, is to encourage all businesses, whether manufacturing or a call center. "There are a lot of communities that request the assistance of the Department of Economic Development to get call center jobs," Blunt said.

The four-county region that includes Cape Girardeau, Scott, Bollinger and Perry counties has experienced job growth and a reduction in unemployment rates in the past two years. That trend, especially in Cape Girardeau County, is built on a diverse economy sheltered but not totally insulated from larger trends, said John Mehner, CEO of the Cape Girardeau Area Chamber of Commerce.

"Because we are not reliant upon one major employer, if things go bad we don't have much trouble," Mehner said. "Unemployment remains stable."

The biggest recent change in the Missouri business climate was the overwhelming statewide vote in favor of a minimum-wage increase. Opponents warned the $1.35 increase to $6.50 an hour would retard job growth. But the 10,800 jobs added in March represent the third-biggest jump during Blunt's tenure in office.

"I think it is difficult to say if it has had a drag effect or if it has been positive," Blunt said. "We have very strong economic growth that is part of the foundation we laid in 2005."

rkeller@semissourian.com

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