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These Jobs Ain’t Coming Back

gardenA great deal of tension seemed to surround today’s jobs numbers and for some reason it feels like people are holding their breath wondering when the lost jobs are coming back. The fact is, they aren’t and we need to stop running the economy like we can produce the magic solution. (Title of this post is nod to Springsteen lyrics from My Hometown)

Many of 8 million jobs lost during the recession were falsely created by subprime lending and total lack of regard for reality. Many of the programs currently proposed mirror the policies of the past in attempts to spend our way to creating thousands of jobs in sectors that probably can’t sustain long term job creation.

The answer is so simple that it’s hard to understand why it eludes.

Instead of creating thousands of jobs one time create one job thousands of times.

In other words, invest in small business. The way out is to take the money being spent on job creation and unemployment benefits and put it into small businesses or organizations empowering small businesses and let them hire one or two more people each in real and permanent jobs. Small businesses are fueling the entire recovery and most of the job creation currently going on this country as it is.

Instead of elephant hunting, let’s do a little economic gardening! (Nod for that term goes to Chris Gibbons Director, Business/Industry Affairs City of Littleton, Colorado)

Economic Gardening is the simple concept that small, local companies are the source of jobs and wealth and that the job of economic developers should be to create nurturing environments for these companies. (More on Economic Gardening from The Kauffman Foundation)

According the U.S. Small Business Administration, small businesses:

  • Employ about half of all private sector employees.
  • Pay nearly 45 percent of total U.S. private payroll.
  • Have generated 60 to 80 percent of net new jobs annually over the last decade.
  • Hire 40 percent of high tech workers (such as scientists, engineers, and computer workers).

Doesn’t it make sense to fuel job creation by fueling small business startup and growth?

Image credit: this lyre lark

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  • http://blog.daycos.com/ Brandon Day

    This answer is simple, but I have an opinion about why it is not widely implemented. Focusing on small local businesses, ie the economic gardening model, takes time and patience, two things we do not have an abundance of in this country. Politicians and most economic development leaders do not feel they can wait for years to show results. Voters and constituents demand to see results after a couple of years, and what they are looking for is big results, not small victories.

    The analogy I think of involves baseball. When a team falls behind in baseball, the natural inclination is to start swinging for the fences in order to hit a home run. Normally, this leads to more strikeouts and a larger deficit. Of course the smart thing to do is continue to swing normally, get some hits, move the runners around the bases, and score some runs to get back in the game. But it is hard to suppress the urge to swing for the fences.

    Most communities in America swing for the fences when it come to job creation. They want that 500 or 1000 employee business to locate in their town, so they can trumpet their success in economic development. Of course, most strike out on those, and continue to fall further behind.

  • Joann

    John, I wholeheartedly agree with your thoughts here, but I'd like to add that our government should have used the recently approved $30 BILLION for Afghanistan for small business & job creation. Another thought might be, opening the doors for entrepreneurs to bring their products/services to market (aka kicking big business' butt out of the way).

  • http://bluecollarcoaching.net James Dibben

    The government does want to help us small business owners. That's why they passed universal healthcare and are encouraging all of us to get into more debt!

    That's all we need to be more successful, didn't you know that? More bills and $300.00 a month in free healthcare coverage.

    John, at least you did find some use for the SBA…

    Stats!

    That's about all I find the government good for these days.

  • http://www.carronlinemediallc.com Social Media Management

    Most Americans do not have any idea how bad things truly are. We are on the verge of a major shift in living standards, and for the first time, we're not going to “leave things better for our children.” Learn a trade. Pay off debt.

  • http://www.ryanhanley.com/about Ryan Hanley

    John,

    I love that you wrote this piece. Unfortunately I think your barking at the Moon. U.S. legislators are far removed from American Small Business they have no idea how to help.

    More regulations, More debt, More policy, More government… This gives them more control and a greater ability to be re-elected which is all the our Elected Officials care about. Being a politician is a Career…

    You don't advance in your career by giving control away.

    I live in Upstate New York. If any one who is reading either lives in NYS or follows our current economic environment you understand my bitterness. I live and breath small business everyday and our elected officials are Taxing us into the Bronze Age…

    Its not a stretch to say that New York is a Semi-Socialist state. Success in New York is not rewarded it is Taxed.

    I don't have an answer but I can tell you that it is going to get ALOT worse before it gets any better…

    Ryan H., http://www.RyanHanley.com

  • http://simplewebguys.com JayTurn

    Here is something I find interesting. In the early stages of settlement, the small towns managed themselves but followed the Federal laws. The towns were small enough where the townspeople could vote on the important issues regarding how the town is run.

    As towns became bigger, the ability to let everyone vote became too difficult so we created the idea of representatives. It has remained this way because there has been no better alternative and I presume those representatives don't want to give up their power/career.

    However, technology now allows us to return to the old days where we have the ability to let everyone vote on important issues. So why are we still allowing a small group to make the decisions on behalf of the masses?

    Particularly when decisions regarding small business are not being made by the people that work with and understand the needs of small business most.

  • http://www.ducttapemarketing.com/blog ducttape

    That is kind of a cool thought

  • http://www.onelensmedia.com Nick Lange

    Very well observed. I may be misinterpreting Guy Kawasaki's point, but in his book “Reality Check”, he suggests that government support of small business job creation (for startups, at least) isn't always as effective as it seems it would be. He argues that entrepreneurial organizations are prone to losing their focus when they start creating less than absolutely essential positions with government support, and that investing government resources in higher education is a more effective way to fuel long-term entrepreneurial growth. If you revisit this topic in a future post, I'd love to see what steps you think our government could take to effectively allocate and manage small business funding. Just finished “The Referral Engine” — great work!

  • Niklaus Lopez

    I think your baseball analogy is dead on Brandon. As Americans we are far to eager to see a change now versus in the future. If we don't hear our government talking about what's going to change tomorrow we're likely to think that nothing is changing or that they're not doing enough to create change for the positive. I see this on every level of citizen, from the educated to the uneducated.

  • http://www.drivingambitioninc.com Jeremy

    Good points, John. I own a small business, and despite no help from the government, banks, etc. we have been fortunate enough to be in a niche that has seen an incredible demand the past 6-9 months. As a result, during that time we have hired 7 more internal employees, as well as at least 60-70 more full-time and part-time truck drivers. I believe we have a great story, but many more companies would be able to have a similar story if they had some support from a government that understood the importance of helping small businesses – the backbone of our economy.
    On another note, I saw you in Indianapolis, IN, this past week. I met you on the curb prior to your presentation. I appreciate all your insight and good common sense approach. Have a great 4th of July!

  • http://www.ducttapemarketing.com/blog ducttape

    Hey Jeremy, it was nice to meet you this week – so great to hear about your success.

  • xtventures

    I've all but given up on the idea of getting any sort of assistance from the government. We encourage all of our clients to consider the option of lean startup; if you can't finance your business on a shoestring, consider a different type of business. Technology has given us the ability to make a fortune with almost no upfront cost.

  • http://www.businessbuilderbookclub.com Joy Johnson

    Gardening small businesses is only a solution if accompanied by a great deal of education and a framework into which startups can slip to become, almost instantly, a functioning part of a larger whole. Otherwise, the redundancy, inefficiency, and lack of any real knowledge will result in catastrophic losses both for the startups and for

  • http://www.alphagraphics.com/centers/phoenix-arizona-us106/index.html Stephen Eugene Adams

    John, being a small business owner, I do like your point. However my observation shows that even if more capital was available to small businesses right now, they would not partake. We are still in hunker down mode. Even if we are given an incentive to hire additional employees, we won't until there is a demand for that help. We need consumer confidence to rise and for the consumer to start spending again. When consumers start spending, small businesses will react, start hiring and will start buying capital equipment again. That's when we need the government's help in pushing the banks to lend to us again.

  • patricidy6r

    “Instead of creating thousands of jobs one time create one job thousands of times.”

    So true! It needs to be read again and again. Thanks for a well-written and thoughtful post. :)

    50k Plus Jobs

  • http://rvabusiness.com Nathan Hughes, @rvabusiness

    Don't forget that encouraging small business startups and growth doesn't have to be strictly through offering money. A revamping of the rules and red tape out there can work wonders, too.

    Here in Richmond, VA, one of the biggest hang ups on starting a brick and mortar, retail business is the red tape and getting all of the different organizations that stand in the way to finally get along and agree on what it is they want you to do.

  • http://www.local-business-search-marketing.com/identifyingyouridealcustomer/small-business-jobs-outlook-bleak-and-bleaker.html Tom Dewell

    Thank you John for this post. I have been blogging (albeit for only a short while!) on my website about how small businesses as the so-called “job engine” of the US economy are getting the short end of the TARP stick. The LA Times ran a recent article about how the job outlook for small businesses is looking beaker than ever.
    I can only encourage them to use alternative commercial finance methods like factoring, or to really crank up their internet marketing so that they empower themselves and our economy at the same time.

  • http://www.rankingchannel.com Maximus

    Great analogy indeed Brandon. There's a reason why the homerun hitter is 4th in the batting line up right?