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Posts tagged new jobs

State policies should focus on homegrown jobs

Posted March 15th, 2016 to Blog

2-3-16sfp-f1A recent report by Michael Mazerov and Michael Leachman finds that the vast majority of new jobs in a state are homegrown: They are created by start-ups and by firms already in the state who are expanding. Only 13 percent of new jobs come from new branch plants of out-of-state companies, or  actual plant relocations to a state. They argue that public policies need rethinking as a result:

“State economic development policies that ignore these fundamental realities about job creation are bound to fail. A good example is the deep income tax cuts many states have enacted or are proposing. Such tax cuts are largely irrelevant to owners of young, fast-growing firms because they generally have little taxable income. And, tax cuts take money away from schools, universities, and other public investments essential to producing the talented workforce that entrepreneurs require. Many policymakers also continue to focus their efforts heavily on tax breaks aimed at luring companies from other states — even though startups and young, fast-growing firms already in the state are much more important sources of job creation.”

Michael Mazerov and Michael Leachman. State Job Creation Strategies Often Off Base. Center on Budget and Policy Priorities, February 3, 2016. http://www.cbpp.org/research/state-budget-and-tax/state-job-creation-strategies-often-off-base#_ftn23

2010-PFw5464Posted by Peter Fisher, IPP Research Director

 

Editor’s Note: This also ran on IPP’s “Grading the States” website — gradingstates.org