The Dynamic Potential of the Jobs and Economic Development Bill, 2023

Today the Chairs of the Jobs and Economic Development Committees in the House and Senate presented their Omnibus bills – what does it hold for wealth building in Minnesota in general and for the ALANA (African American/immigrant Latino Asian Native American) communities in particular?

First, it is the first time in Minnesota history that the Jobs and Economic Development committees are all led by ALANA legislators – Senator Bobby Joe Champion, Representative Hodan Hassan and Representative Jay Xiong. In this historic moment, the Jobs and Economic Development bill these three leaders help craft with their colleagues and citizens, will shift the economic base in Minnesota in dramatic ways.

Both the House and Senate bills are over $100 million in investments compared to the Governor’s budget for Jobs and Economic Development. A big difference is the House and Senate bill allocates investments in several workforce and business development organizations as well as within DEED, using different strategies. For example, in business development, the Senate version creates spaces for greater Minnesota and across areas of Minneapolis. In workforce development the House version puts a greater focus on workforce investments in targeted communities.

All three – the Governor, House and Senate are investing in a dramatic shift in the economic base of Minnesota with massive investments in the microchip industry and in bioindustrial manufacturing. This investment together with the existing high-tech industries in Minnesota will help build the economy of the future.

The economy of the future needs workers and so there are investments in the Drive by 5 Workforce Fund – workforce pipelines – jobs with good wages – technology, caring professions, education, manufacturing, and trades. There is also increased investment in youth and targeted communities. These investments in the workforce are critical given the fact that on average 24 percent of Minnesota’s workforce are approaching retirement age.

In the composition of organizations receiving direct appropriations – most of the organizations are nonprofits serving a diverse population with a few serving specifically one or more of the core ALANA groups. The organizations tend to be larger and with greater experience and track record in workforce or business development. At the same time there are investments in building capacity of organizations especially those under a million dollars in revenue. There are also some investments in offering capital with alternatives to interest or with low or no interest. A new emerging developer fund is also established and funds available for property acquisition.

The good news is there are investments across the range of business development from start up to scale up and in workforce development from youth, reentry workers and high skilled high wage jobs.

I think Minnesota is set on a good trajectory to build wealth.

There are some stretch goals to consider yet this session – the budget targets for jobs and economic development were massive compared to the base year – but massive is a relative term, meaning are these investments enough t0 close the estimated $287 billion racial disparity gaps in Minnesota?

So, let’s see what some of the math reveals. The table below shows the existing investment in workforce training programs. Using the average cost of the training program from DEED’s latest workforce report – $2909 per participant and assuming 60 percent of the workers served are ALANA – we find with an average of both House and Senate Bills we can reach an estimated 9 percent of the ALANA workforce over the biennium. That is a good number. If we add $100 million to this pool we could reach 13 percent of the ALANA workforce. Given the 24 percent of the workforce are near retirement age, there is good justification for accelerating the workforce investments with an additional $100 million in investments.

Recommendations:

1. Increase the investment in ALANA workforce development by $100 million this session – this could be allocated for the 26-27 biennium.
   
2. Increase investments in the Emerging Developer program by $ 50 million for investment in land banks, land trusts and property acquisition.
   
3. We need to be strategic as we chart out the workforce pipelines between and within sectors to get workers to where we need them the most and where they would like themselves to be employed. This would require a deliberate investment in particular pipelines which may not necessarily be the 5 identified. For example – what are the skills needed for the new biomanufacturing jobs and how are our schools and university systems aligned to grow that pipeline?
   
   
4. In business development we also need a strategy for the growth clusters around biomanufacturing, microchips, clean energy, and digital technologies. How are the capital, technical assistance, product development and marketing ecosystems aligned to enable growth to explode in this new economy?
   
   
5. Establish goals for ALANA business and workforce development – The challenge is to ensure the ALANA communities are integrated into these new pipelines to future prosperity and this can happen only with serious intentionality. The experience in Minnesota is that integration of ALANA communities better occur with federally funded programs that require inclusion goals. The state has a weaker intent and legislation should require goals for ALANA recruitment and success in these business and workforce pipelines.
   
   
6. Adopt a “Transparency Note” with the Jobs and Economic Development bill. When a bill gets translated into a program in DEED, implementation can become a nightmare for the small business owner or the worker needing that training. Rules, regulations, protocols all need to be user friendly and well informed. This can happen with the appointment of a Citizen panel for every new program who will help craft the new rules and protocols. For example, a 5-member panel comprising of a representative of an ethnic chamber and a Greater Minnesota chamber, 2 small business owners with employees, 1 workforce training provider. This strategy places the customer at the heart of the program.
   
   
7. Leverage cultural assets of the ALANA communities into wealth building activities through a $5 million matching grants program to integrate art, murals, music, cultural events and cuisine in businesses. This will help create cultural destinations which can become cultural districts in time. Imagine the experience of all 200+ countries in the world found in Minnesota – won’t that make us a Global Destination?
   
   
8. If we want good reporting, documentation, accountability in projects funded allow a greater percentage of the project funds for “back office” investments. This will help build solid organizations and businesses leveraging state resources.
   
   
9. Expand the culture of “boots on the ground” at DEED – with staff increasing their engagement and interactions with the people they serve and bring the vast pool of resources to people rather than waiting for them to apply for resources.