If the president wants to grow more jobs, he is going to need a clear plan for what needs to be done. So far, the administration has tried a lot of measures that have been costly, but not successful enough. A turnaround in tactics is needed to chart a course to create jobs.
Business uncertainty about where taxes and regulation issues are heading is preventing them from investing in new jobs. The President’s bi-partisan deficit commission proposed some tax cuts and tax hikes to reduce the nation’s debt, but the commission did not receive enough votes from its 18 members to send the plan to Congress for approval. There were many good proposals from this deficit commission, including tax revisions and social entitlement cutbacks. If the commission’s recommendations were approved, taxpayers would have to sacrifice with cuts on entitlements, earmarks, tax reforms and reduction strategies on the future huge debt.
Meanwhile, three things must be done to spur job creation. The administration must reach across the aisle to Republicans, to show a softening of the President’s position on tax cuts. Incentives must be provided to encourage small businesses to hire more unemployed. And education must be available to retrain people for jobs in the new economy. Many people believe tax cuts are the key to creating jobs. Some people do not. But with more income, people spend more for goods and services and that creates more jobs. The Bush tax cuts extension has been in a temporary stalemate, but President Obama has reluctantly agreed to extend all of the cuts for two more years, if coupled with an extension of unemployment benefits extended for an additional 13 months, for those still unemployed.
Many of the Democrats in Congress are still saying “no” to any deal which would continue the present tax rate for people earning over $250,000 a year. However much citizens may disagree about tax policy, for businesses right now, tax-cost certainty is what is paramount. Small business leaders need to know what each potential employee will cost and what they, as entrepreneurs, will be able to take home in pay.
If the tax cuts are not voted and approved in this lame duck session, over two million people, whose benefits expire in December, might lose their unemployment compensation benefits.
Our official unemployment is 9.8 percent today, yet real unemployment is 16 percent, which includes people working only part time, and those who have stopped looking for jobs. Lower taxes are needed to keep manufacturing and farm industries competitive in America. Small businesses need incentives like lower taxes and fewer regulations in order to compete against foreign competition. Banking loans and tax incentives need government support to open up a better pro-business climate. More bipartisan collaboration is needed, without the political posturing that happened in the House and Senate votes last week, on both sides of the aisle. We need less finger-pointing and blame-gaming, and more focus on what is best for this nation’s people. The administration will have an opportunity to present more detailed plans to create jobs for the long term. It could take almost five years to get back to the pre-recessionary unemployment figures.
Education is the key for future job creation. The most promising jobs will result from education in college sciences, high tech, math, engineering and health care fields. The unemployment rate for college graduates is only half of the rate for those who didn’t get a college degree. Apprenticeship and training programs in computers and business skills will help the unemployed when applying for future job openings. Careers in skilled vocational trades like plumbing, electrical and carpentry offer good opportunities, too.
Young high school graduates need to get as much vocational or college training as they can. For those who are older, re-training or more education will be needed to meet future job skills.
Some unemployed persons should consider starting a small business. The Small Business Administration (SBA) offers free or low-cost sources to counsel or conduct business education seminars and workshops. SBA’s SCORE agency teaches you how to develop a business plan, learn about marketing and finances to run a business. Local Chambers of Commerce, community colleges, Economic Development and International Trade Agencies and State Economic Development Agencies can help with business information and sources for business loans.
Our elected officials in Washington need to get busy right now. If tax cuts and extended unemployment benefits get signed and delivered in December, it will be good for our citizens and good for our nation.
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