Tuesday, January 14, 2014

Promising Jobs: Foolishness versus Economic Gardening

Leader of Ontario’s Progressive Conservative Party, Tim Hudak (PCPO – Niagara West-Glanbrook), announced laughably bad policy this week. I will leave the details out because it is not the details that matter, but the nature of the promise. Hudak promised the people of Ontario that his government (were he and his party elected) would create one million new jobs.

This is the chronically bad math that plagues our current politics. Anyone who believes that Rob Ford saved the city of Toronto a billion dollars may join the cohort of believers in the one million jobs while the rest stay on the side of reality.

Aside from being misleading the policy announcement is ridiculous. A so-called conservative should know that governments do not (generally) create jobs. If you want to start infrastructure programs, hire more government workers, etc. those are examples of the government creating jobs. Businesses hiring employees may have something to do with government policy, but they are more likely responding to the supply and demand of their market.

Mr. Hudak’s commitment reveals a chronically dumb approach shared by governments the world over and at all levels. Politicians love ground-breaking ceremonies. They are flashy and, in the mind of many, clear demonstrations of investment and job creation. Any careful thought about the number of jobs created by a single box store, or head office or factory are overshadowed by those routinely produced by small businesses. However, governments spend exorbitant amounts of money in loans and tax holidays to invite established businesses with deep pockets for the perception of job creation. Not to harp on the PCs alone, this was a preferred tactic of the previous Liberal government under Mr. McGuinty.

For the last few weeks I have been following the work of Chuck Marohn and an organization called Strong Towns.  Their policy work has caused me to shift how I look at cities, or provide buttressing to some of my existing notions. One of the concepts Mr. Marohn discussed on a podcast from last fall was “economic gardening.” During the podcast Marohn and his guest Chris Gibbons discuss the folly of trying to capture big fish. Gibbons, and other economic gardeners, argues that much more good could be done by the economic development coordinators of cities and towns everywhere if instead of trying to attract one big company they helped small businesses find out how to add one or two employees, or grow their businesses.

Economic gardening takes its name from the painstaking art/science of biological gardening; weeding, pruning and careful maintenance of plants to produce a bounty. The metaphor is apt. However, politicians cannot use this strategy to take credit for a business coming to town, but must instead by satisfied with the careful cultivation of healthier businesses, stronger neighbourhoods and higher employment.

The other side of economic gardening is providing something like greenhouses so that entrepreneurs can get their start by offering low cost consulting and resources. This may be one of those issues where public policy and politics do not meet. In my estimation one is far more reasonable and plausible than the other, but far less saleable as a sound bite. The idealist in me would hope that the interests of the public would ultimately shift policy the way that does the most good, and it would helpful if our politicians were less destructive in that aim.

Special note, I have a guest post up on TVO’s The Agenda’s blog today arguing against term limits for politicians. I hope you’ll check it out.

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