Lots of economic development spending, little economic development

A Policy Brief from the Allegheny Institute reports that Gov. Rendell’s jubilation over the latest job report is misfounded. While the Governor’s press release boldly claims that jobs are “at an all time high,” the Allegheny Institute notes:

  • Employment in the private sector is about 27,000 below its Feb. 2001 peak, but the government has added 32,000 jobs in that time.
  • Job have been created in sectors that did not receive much state aid, not the recipients of $925 million of taxpayer money the state “invested” in job creation this year.
  • Other states – Florida, Virginia, Idaho, and Nevada – had phenomenal rates of jobs growth. While these state do not spend as much taxpayer money on economic development, they do have (a) lower taxes and (b) right-to-work laws.

Pennsylvania lawmakers need to reevaluate their notions of economic development: greater spending leads to economic stagnation, whereas lower taxes and right-to-work leads to job creation.