Job creation, government style, is a splashy, photo-op filled, nice-sounding program that makes politicians sound clever and seem proactive. The Boise Valley Economic Partnership is a taxpayer and private money example of the process. They are now four years into this five-year, $5,000,000 government program.
The planned $650,000,000 private/taxpayer investment has fallen short of the goal, but only by $530,000,000. The planned 5,000 new jobs has fallen short by 3,194 jobs. But the Boise area did get 1,806 new jobs (… while losing 10,000 – oops). Those new jobs only cost $66,445 each!
With official unemployment reported to be 10% and actual unemployment at 22% (see shadowstats.com) – and rising, it sure looks like a real good time for the Idaho state government to deliberately, with great fanfare, publicity and ribbon-cutting ceremonies, attempt to create poverty and joblessness.
Meanwhile, 17 million small businesses in the USA constitute 99.7% of employers, employ 52% of the private workforce and account for 40% of the GDP. In ’94-’98, small business-dominated industries provided 11.1 million new jobs; virtually ALL of the new jobs created during that time period. Small businesses are most likely to generate jobs for youth, older workers and women, provide 67% of first jobs and produce 55% of the US innovations.
Instead of helping and encouraging small businesses, however, government assaults them, restricts them, competes with them and prevents them. Bureaus, boards and officials appointed or elected require licensing, paperwork, compliance, audit, testing and dictate many practices that stifle innovation and often prevent success. While jumping through government hoops is a small part of a big business, it is a big part of small business.
Programs that demonstrably do create jobs are private micro loans. Though distinctly un-splashy, these are proving to be the best way to lift economies out of poverty and unemployment.
A micro-loan is as little as a few hundred dollars invested into a one-person business with minimal qualifications. That tiny borrowed amount can launch a vegetable stand, repair shop, or bicycle taxi — a living in other words. As each micro-loan is repaid (and most are), the effects of that small goodness are amplified and leveraged by being loaned out and invested again and again.
For more on micro-loans, see micro-loans online, Wikipedia, Micro-enterprise comes to America, accion.org or search the Internet for more – there’s a lot of success out there for not much money… and NO taxpayer dollars at all.
What can/should government and the governor do? Reduce taxes, reduce barriers, eliminate restrictions to entry, eliminate paper-pushers who demand to be fed papers that someone has to create rather than tending to their business.
The best and consistently most successful thing government can do to create jobs and wealth is to get out of the way. Too bad nobody is likely to get a picture of me cutting a ceremonial ribbon to introduce that program.