The American Jobs Act

Well, we’ve seen the President’s new jobs plan—The American Jobs Act—and it looks pretty much like the programs of the 1930’s (which didn’t work very well then until the second world war started). Although I think it is a good idea to fix some of our roads and highways before they are beyond repair, the jobs incentives fell woefully short of accomplishing much of anything.

All the small business owners I know hire employees to grow their business in support of an increase in sales. Likewise, when sales fall off, we all reduce our workforce because there is not enough for all the workers to do. Most small businesses do not have huge cash reserves to carry non-producing workers.

To take it one step further—in a growing economy most small business owners will hire more employees in ANTICIPATION of increased business. However, no anticipation—no hiring.

The federal government can pass out all the incentives they want—in the form of hiring bonuses, payroll tax reductions, and on and on—but the fact remains; if a small business owner does not need a new employee to fill a current (or anticipated) job opening, they will NOT hire a new employee. Small business owners are too savvy to fall for the government’s financial smoke and mirrors incentives.

Why aren’t the people in the White House and Congress smart enough to know this?

Maybe this is one reason why:

  • Only 8.4 percent of all lawmakers majored in a field related to economics.
  • Only 13.7 percent of lawmakers studied business or accounting.
  • Only 11.5 percent studied a field related to science or technology.
  • Over 55 percent focused on government or law studies (perpetuation of professional politicians?).

(Data from The Employment Policies Institute [EPI]).

I have yet to find any information on how many people in the White House, or in Congress, have actual experience as an entrepreneur in a small business—but it appears the number would likely be quite small.

And we wonder why Washington cares so little about small business!

Where does this situation leave American Businesses? I think a recent article in The Huffington Post spelled it out pretty well—at least in the manufacturing sector—with the title: “American Manufacturing Slowly Rotting Away: How Industries Die.” What more can I say?

What about your business? Your industry?

I am also wondering if this situation is endemic to the U.S., or do other developed nations, such as the European Union also suffer from government suppression of small (or not-so-small) businesses?

Leave a comment and let me know how your business/industry has been (and is being) affected over the last few years.

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6 thoughts on “The American Jobs Act

  1. Way to go Bob!! Absolutely right on the money!! I just laid two people off due to seasonal business volumes. No incentive from any plan would entice me to hire them back at this time. What good would a $5000 tax credit do me to hire someone costing me $1800 CASH every two weeks without the business (cash flow) to support it?? Your comments make me smile, especially the perpetuation of professional politicians. Stupid is as stupid does.

    1. Steve–Thanks for the comment. You certainly hit my point dead center—without work for employees to do, small businesses are not going to hire excess employees…no matter how much incentive the government offers.

      I found it interesting (and sad) that when the President sought advice from the private sector on how to best create jobs, he went to CEOs of some of the largest corporations in the world. He likely would have been just as accurately advised if he had simply gazed at the stars one night. So much for SMALL BUSINESS being the backbone of America’s economy.

      You’re right, it is no surprise that the majority of our lawmakers (those who have no education, training, or experience in running a small business) are helpless to assist small businesses to grow and create new jobs.

      I wonder if this is a problem only in the U.S.?

  2. I read an article the other day that gave a statistic of the percentage of cabinet members and appointees in the past Presidential cabinets going back to Carter, who had either owned or operated a small business . While most had anywhere from 35% to 54%, our current administrations was only 8%!! It’s no wonder small businesses around the Country are falling off the map, the Obama administration is clueless. Their idea of “business” IS the fortune 500. They may just as well be watching the night sky where someone like me is concerned. $700K a year in sales with 7 employees? HAHAHAHA that’s not business.

  3. ok, I found the source of the article. It was printed in Forbes magazine in 2009 by Micael Cembalest. The article was titled “Obama’s Business Blind Spot” here’s the url:http://www.forbes.com/2009/11/24/michael-cembalest-obama-business-beltway-cabinet.html

    I was wrong. The study went back to T. Roosevelt, included 432 cabinet appointees, and included all private sector experience, not just owner/operator/manager of small businesses (he’s being very generous). The bottom line to the article is this administration is compiled of mostly public sector bureaucrats with little or no experience with small business. Period.

    This was 2009, I know we are much better off owning a small business today, 2 years later!! yeah right.

    1. Steve–Thanks for the information. I believe that for a very long time, the level of BUSINESS expertise in our government (local to federal) has declined, while professional politicians have taken over. Certainly a sad state of affairs, and one I fear will not be reversed unless small business owners rise up and make their voices heard across the country.

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