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Priming the Job-Creation Pump
By. Dr. John Hilston
August 7, 2012 - According to the Bureau of Labor Statistics, the current U.S. unemployment rate has risen slightly to 8.3 percent.
If there is a silver lining in this number, it’s that the Florida unemployment rate has fallen from nearly 11 percent in January 2011 to 8.6 percent as of June.
Still, many are concerned about stubbornly high unemployment rates.
Since 65 percent of new jobs over the past 17 years have come from small businesses, I would argue that what’s good for this sector is good for American job creation.
Individual business people create most of the jobs that are created. In fact, without the tax dollars paid by business owners and their employees, government creates nothing.
Politicians take note: If you want to solve the unemployment problem, it might be a good idea to promote business-friendly government policies.
One positive step recently on the federal level was the partial reform of The Securities Act of 1933. This act previously restricted investing in non-registered securities, such as startups, to accredited investors, such as people with net assets of at least $1 million.
Unless you had a lot of millionaire friends, it was illegal to ask non-accredited investors to invest in your startup. In a rare bi-partisan reform, this provision against non-accredited investors was relaxed.
I tend to agree with an entrepreneur friend: It’s possible that a new market of investment in startups will appear, but this will take time.
Meanwhile, since people create jobs via the market, unleash the markets.
While some regulation is necessary, government should endeavor to be a partner with business instead of an adversary.
What do I mean by this?
It would be nice to see government and regulators differentiate between “good citizen” market participants and the immoral players in those markets. I hated group punishments when I was in school, and I still hate them.
Also, the government should use the power to tax sparingly. The U.S. has the highest business taxes in the industrialized world. As a country, it is better not to lose jobs to lower-tax countries.
While many businesses have the ability to pay these taxes, the taxes are not without cost. When a business has to pay higher taxes, it has less money to acquire machines and buildings, and this hurts job creation.
Let’s strike the right balance between regulation and business-friendly policies, and get job creation rolling again.
Dr. John Hilston is an associate professor of economics on the Brevard Community College Palm Bay Campus. He writes this column for Florida Today newspaper.