The latest unemployment numbers came out late last week. Unemployment in the U.S. has come down to 5.5% from 5.7% last month. That’s good news and let’s hope unemployment keeps coming down in the future.
The bad news is that the unemployment number doesn’t take into account the huge number of people who have been so discouraged in their job hunt that they’ve given up looking – they’re not even counted. It counts people who are working part-time just as much as if they were working full-time. And people who are under-employed – let’s say they have a master’s degree or even a doctorate, can’t find anything in their field, and are flipping burgers at a fast food outlet (it happens), just as if they had landed a job in their chosen field.
So the unemployment number doesn’t necessarily tell the whole story.
What is the best way to grow jobs in today’s American economy? Here’s the way I see it.
70% of new jobs created in America today come from the small business sector of the economy. I have been a member of the House Small Business Committee for 19 years, and now Chair the committee. There are four areas where improvement could mean considerable job growth.
First, government regulations. Congress and the federal bureaucracy are constantly bombarding small businesses with new rules, regulations, and red tape. Rather than focus attention on what it is they do, small business owners spend too much time fighting off the government. We should stop overregulating.
Second, taxes are too high, and too complicated. If I were king, I would do one of two things relative to taxes. I’d either throw out our existing federal tax code, and replace it with a flat tax, or at least a flatter, simpler tax code.
Or I’d get rid of the IRS and federal income taxes altogether, and replace them with a national sales tax. However, I’m not king, so the likelihood of either happening anytime in the near future are pretty slim.
So what should we do relative to taxes? Reform the tax code; simplify it; broaden the base and lower the rates. And Congress should announce any changes in tax laws early enough for small businesses and individuals to plan ahead; not do things at the last minute, as usually occurs.
Third, improve access to capital. In order to expand, purchase new equipment, or sometimes even meet payroll, small businesses often have to borrow money. Getting a loan through the Small Business Administration (SBA) can be a paperwork-heavy nightmare. And passage of legislation known as Dodd Frank during the first term of the Obama Presidency (when Democrats controlled both the U.S. House and Senate) has added additional layers of bureaucracy to the lending process in this country. Dodd Frank should be repealed, and the SBA lending programs should be streamlined.
And fourth, improve trade opportunities for American small businesses. 96% of consumers on the globe reside outside the borders of the United States. Yet only 1% of small businesses sell their goods or services outside the U.S. Even a slight improvement in this area could result in huge numbers of American jobs being created.
So we’ve got our work cut out for us. Let’s get started.
