State program little help to outstate economy

JOBZ has been more effective in the metro area.

Ian Larson

Despite a state program to create appealing jobs in rural Minnesota, the demand for those with bachelorâÄôs degrees is still greater in the metropolitan area than in lagging outstate economies. A state program to bolster those rural economies has created more than 6,000 jobs in five years, but its impact has been minimal in the struggling economy of the Minnesota Iron Range, state records show. Of the 6,000 jobs created by Job Opportunity Building Zone , a state program offering tax benefits for businesses relocating or expanding to Minnesota communities outside the metro, only 240 have come in the beleaguered Iron Range in northeast Minnesota. The JOBZ region for the Iron Range had a July unemployment rate of 9.7 percent âÄî compared to a seasonally adjusted rate of 8.1 percent for the whole state, according to the Minnesota Department of Employment and Economic Development. By comparison, more than 1,700 jobs have resulted from agreements signed in JOBZâÄôs southwest Minnesota region where the unemployment âÄî 6.8 percent âÄî is much lower, according to DEED. In a 2008 report, the Office of the Legislative Auditor found that JOBZ had successfully stimulated business expansion and relocation to rural Minnesota, but the program failed to effectively target the neediest areas. The auditorâÄôs report found that the âÄúprogramâÄôs lack of targeting to economically disadvantaged areas should be of particular concern.âÄù Following the release of the report, DEED altered its JOBZ agreement contracts but did not change the terms of JOBZ agreements in the neediest areas. All 10 JOBZ regions across the state have identical tax incentives for businesses, said DEED economic analyst Neal Young. JOBZ supporters point to the variety of skilled jobs that result from its agreements as a sign of its positive effect across the state. In one deal in Marshall, a city of 13,000 in southwestern Minnesota, a food science company agreed to create 15 jobs but instead provided 60. âÄúThese jobs were not your [assembly line] worker jobs âĦ these were biochemists, genetic engineers, nutritional scientists,âÄù said Marshall Economic Development Director Mark Hanson. While registered nurses remain the most sought after employees across the state, laboratory technicians are the most in-demand workers with bachelorâÄôs degrees in the Iron Range. In the southwest, accountants top the list for those with bachelorâÄôs degrees. Software engineers are highly sought after in the same position in the Metro area. Hanson described the JOBZ process as a way of priming an area by scouting locations and gathering information so that interested businesses have resources available, even before they commit to an area. âÄúSometimes things happen that wouldnâÄôt have happened if you hadnâÄôt taken the risk,âÄù Hanson said. Since neighboring states like Wisconsin have similar incentive projects that compete with JOBZ, the programâÄôs limitations donâÄôt stop at just competition within the different regions of Minnesota. âÄúWe have the tools that we have, but certainly there are other states that are more aggressive in chasing the big projects,âÄù Young said. More 235,000 Minnesotans were unemployed during the month of July, but JOBZ has reduced that number and created some lasting work. âÄúWhen youâÄôve got job declines over the past, you know, letâÄôs say, two years, the fact that weâÄôre using JOBZ to create jobs is a positive for the stateâÄôs economy,âÄù Young said.