Jobs and better jobs will be an important issue in the upcoming gubernatorial campaign.

Most new hires in Montana as well as in the rest of the country come from startups. For the third year in a row, the Kauffman Index of Startup Activity ranked Montana first in the nation for entrepreneurial activity and ease of startup, with 540 new entrepreneurs for every 100,000 adults in a given month. This was up from 490 new entrepreneurs in a given month in last year’s report. The report also showed that Montana’s startup density, which measures the number of startup firms per 100,000 residents, was up from 184.7 last year, to 195.7 in this year’s report.

To find the reason for Montana’s remarkable accomplishment of being No. 1 in startup leadership, we need to look at the business/government partnership programs Montana has instituted.

Gov. Steve Bullock initiated the Main Street Montana Project in early 2013 by enlisting the services of two of Montana’s most respected and accomplished business leaders: Larry Simkins, CEO of the Washington Companies, and Bill Johnstone, CEO of D.A. Davidson Companies. The project plan was released in early April 2014. It identifies five pillars upon which the plan is built:

1. Train and Educate Tomorrow’s Work Force Today

2. Create a Climate that Attracts, Retains and Grows Businesses

3. Build upon Montana’s Economic Foundation

4. Market Montana

5. Nurture Emerging Industries and Encourage Innovation

In addition, in Montana, a prospective entrepreneur has the Montana Business Navigator. It is an easy to use environment where businesses can find the requirement and tools they need to own and operate a business in Montana. Further, a prospective startup will find on the internet the Montana Business Checkilist for new and existing businesses, which brings together all of Montana’s business permits and licenses in one location. After the first month the program already had 3,500 web clicks, and 200 people had used the business checklist part of the navigator. Other states have not been able to match this performance.

Obviously, we need to continue and improve these programs, but being the national leader in startups is not enough. We need to increase the pay of Montana’s wage-earners. Nationally employee income dropped again in February, a trend since the late 1960s. The most important segment of Montana’s economy is consumers: retirees and other investors, tourists, and, above all, the wage earners. To keep the contribution to the economy that comes from retirees and tourists, we need to keep the place attractive (something we’ve not been very good at). But the most important need is to put money in the pockets of wage earners — the crumbling middle class.

There is little state government can do about the loss in market value of natural resources and subsequent loss of jobs. So we need to look at what state government can do. Particularly here in our valley but also statewide, the major consumers are wage earners. The growth of our economy depends on how much money they have to spend. There are things that state government can do for workers and, therefore, for all of us:

(1) Raise the minimum wage. (Oregon has given us a model.)

(2) Institute a reverse income tax. (Take money from the top income bracket which is likely to be sent to Wall Street and give it to people who will spend it locally. (It is hard to think of a quicker, more effective way to boost the economy.)

(3) Wage a constant publicity campaign to convince people to buy local. (We send cattle to Kansas City and buy the beef back at three or four times the price. We buy beer from breweries owned by Belgians.)

(4) Eliminate tuition at public colleges and universities. (Land-grant, tuition-free colleges and universities, culminating in the GI Bill, were significantly responsible for creating the most generally prosperous country the world has ever seen; but we ended that investment, and in the competitive world of the 21st century charging tuition at colleges is a slow form of economic suicide. When there was no tuition, new graduates could spend excess income on buying a house or other local products. That repaid the taxpayers several times over for their investment. Now new graduates have to send more than their excess to Wall Street banks. How did we let them sucker us into that one?)

Then comes the hard part. Here’s what we are up against. Only a miniscule number of American corporations pay more of their income to their employees than to their stockholders. (Stockholders are largely people out of state; employees are people in state). In 1997 the Business Roundtable (a lobbying group) issued a statement of corporate purpose: “The principle objective of a business enterprise is to generate economic returns to its owners.” Weyerhaeuser president and CEO, Doyle R. Simons, recently said, “In the coming months we will be relentlessly focused on creating value for our shareholders by capturing cost synergies….”

Any fiberboard press operator must be pleased to learn that, now, he is a cost synergy. It doesn’t have to be that way. We need to convince home-grown startups (our specialty) to see it as did Herb Kelleher, former CEO of Southwest Airlines, who said, “Your employees come first. And if you treat your employees right, guess what? Your customers come back, and that makes your shareholders happy. Start with your employees, and the rest follows from that.”

We also need a business/banking/government plan (other than cutting wages) for keeping manufacturing in Montana rather than shipping it overseas. When Applied Materials took over Semitool, the CEO warned that most of the company’s customers are in the Far East and there is serious pressure from a bottom line point of view to move manufacturing to be near the customers. Another good reason for us to continue to emphasize local startups by loyal Montanans.

Because the largest portion of corporate income goes to owners rather than employees, whenever a Montana corporation is sold to out-of-state owners, the largest portion of the income goes with it. Is it possible to have an imaginative, cooperative plan between bankers and government to keep ownership of Montana corporations in the state?

Robert O’Neil is a resident of Kalispell.