Jobs and Growth

If there’s one thing that Montana’s public officials and legislators all seem to agree on, it’s that we need more jobs.  But when you look at local areas around Montana, the experience with job creation varies enormously. There are a handful of counties, sweeping from Flathead to Yellowstone, where jobs have been created pretty rapidly; more rapidly, in fact, than in the state as a whole, or even the nation. Missoula County is in this group. At the opposite extreme, there are parts of Eastern Montana where job creation has been very slow (well below average) or even negative. What does job creation mean in these very different situations?

One important fact to remember is that job creation and population growth go hand in hand: you can’t usually have one without the other.  In Eastern Montana, this means that job creation may be the way to stabilize communities and rural areas that are in decline. In Western Montana, on the other hand, rapid job creation means rapid growth, with all the pressures and problems that can create.

In short, job creation can be a lifeline for some Montana communities, and a mixed blessing for others, as they cope with the effects of the rapid growth that comes along with the jobs.

When the public decides to support (through tax incentives or the subsidized use of public resources or by making infrastructure investments) a project because it will create jobs, it’s usually because they expect job creation to lower unemployment and raise wages. That outcome should help out low income families and lower poverty rates.  But unfortunately, we can’t count on job creation to work that way. In part that’s because the effect of people moving in and out of a community can easily swamp the effect of job creation. And it is often the case that the match between low wage workers and the new jobs isn’t very good. In Missoula County over the past decade, for example, we have had above average job growth, but below average growth in pay per job, and poverty has been pretty persistent.

When the public is asked to support job creation and economic development initiatives, it’s important to keep in mind what is at stake for the community at large. Growth comes at some cost, and unless it is carefully planned and tailored to local needs and conditions, it won’t do much to help the people it is supposed to help. Assuming that growth always “trickles down” to those who most need it is not borne out by experience.

There’s nothing wrong, of course, with creating good new jobs and bringing in people to fill them; for example,a lot of that kind of job creation has happened in Missoula with the expansion of the medical care industry. But those kinds of jobs aren't going to do much to help the low income residents who are already here.