Obama’s Plan – Creating New Jobs Now

“What do we want? Jobs! When do we want them? Now!”

Americans have spoken, and the message is that the high unemployment rate is becoming simply unacceptable. In order to create some of these much-needed jobs (and salvage his own political career), President Barack Obama is introducing a new measure that claims it will create middle class jobs quickly, putting workers back in the office, factory and construction site.

Will Obama’s Plan Work?

So, what many people in the United States want to know is: will it work? And, just as important, will it work quickly? Even those among us who are employed know too many people who have been touched by the recession. The President’s package includes six basic ideas, which range from highly controversial to simple common sense. Here is a short analysis of Obama’s proposed package and how it will affect Americans. More specifically, we will look at how it is going to affect the greatest job-creating force in the nation: small businesses and entrepreneurs.

• Build infrastructure. It is ironic that, while the government is paying out millions in unemployment benefits, the infrastructure of the United States is crumbling around us. We don’t usually see the effects until they create a crisis. A good example would be the crumbling levies that sit quietly until a large storm or hurricane hits and then break altogether. With many of the unemployed workers in order nation unemployed construction workers, it makes sense to take this nonworking workforce—many of whom are getting a government check anyway—and hire them to correct some of our major infrastructure problems. This is similar to the New Deal associated with Franklin Delano Roosevelt.

How will this affect small business owners and other entrepreneurs? If you are in the construction or engineering trades, there will be more work available in your sector. If you are not in these trades, you still will see the economy stimulated as more Americans are given higher paying work and hope for the future.

• Lower the tax burden. While the former Economic Recovery Act was a boon for large corporations, most of the tax breaks and funds earmarked for business stimulus were given to corporations rather than to small businesses. In fact, small businesses, which have created more than ninety percent of the new jobs in the recession, received less than a percent of the tax breaks and bonuses.

One of the key problems is that hiring new employees is expensive. There is a huge amount of taxes involved in keeping employees, and that is in addition to wages and benefits. It is a huge burden in times of economic growth; in a recession, few businesses will take the risk. Obama’s plan will lighten the tax load on small business who hire, fixing one of the core issues that is keeping the economy down.

• Streamline regulation. There are many regulations regarding becoming an entrepreneur. Some of them are common sense measures to protect the public, but others seem to make no sense. This has a many-fold effect on entrepreneurs. First, it makes people reluctant to open a small business if they have never done so before. After all, it is too easy to make a small misstep and end up in trouble. Many of these regulations have to do with hiring, which can make existing sole proprietorships wary of hiring.

Obama wants to go through these regulations with a fine toothed comb and get rid of the ones that don’t serve any real purpose. This can only be a good thing for the many entrepreneurs who are baffled by the plethora of red tape that seems to accompany every step of business growth. Unfortunately, this will only affect federal regulations, while most of the really zany restrictions are local or state laws.

• Reform free trade. This one makes many business owners nervous, because one of the key factors in the United States recession is the virtual evaporation of low-skilled work as technology allows business owners to hire overseas workers at lower prices. Many of the new trade agreements that Obama refers to are actually existing ones that have not been signed or are stuck in red tape. It is estimated that these agreements will save almost 400,000 jobs and create many more.

For some entrepreneurs, this will mean that new international markets are open for business. For others, it will mean that their products face less foreign competition on American soil. Either way, it will be a good move for entrepreneurs, because Americans are currently on the wrong side (the unemployed, nonproducing side) of many key international agreements.

• Encourage ecologically friendly practices. Many buildings in the United States are immensely inefficient. There are common sense ways of making huge improvements, but who is going to pay for that? Obama  suggests that the government should help. The green section of his new proposal could save Americans $40 billion in energy, which will certainly help businesses that struggle with overhead. Because many companies will be contracted to provide these upgrades, it can mean more work for businesses in the green industries.

• Train future workers. One of the main problems behind unemployment is that there is currently a mismatch between the training of American workers and the needs of potential employers. Many, many companies are hiring and cannot find the skilled and experienced workers that they need. This is especially true of fields involving technology and science. In fact, many businesses are having to apply for special permits to bring in skilled employees from other countries.

Obama plans to deal with this by encouraging companies to hire interns in high demand fields such as engineering. This gives students the chance to train for a career in which there are actual jobs. This will not create jobs, but it will fill current positions with American employees rather than specially imported immigrants.

Because the new measure focuses mainly on the entrepreneurs and small businesses that are actually creating work and bolstering the American economy, Obama’s plan might work. However, it only has a chance to do so if it can make it past a highly divided Congress. This is where Obama’s leadership skills will be put to the test. As the President pointed out repeatedly in the speech, the new plan includes actions that both Republicans and Democrats have traditionally supported. We will have to see if Congress can put aside their squabbles and personality differences long enough to actually do their jobs.