With unemployment now at 9.2%, it’s time to admit that whatever the federal government has been doing to create jobs isn’t working. It’s time to re-think who the job creators are and what can be done to help them.

Past is prolog
Small businesses have historically created 64% of all net new jobs over the past 15 years. A Kauffman Foundation study last year showed that most of these new jobs are created by startups.

For the startups
What is even more interesting (and self-evident) and may not necessarily be reflected in these impressive small business job creation numbers is the fact that those who start a business no longer need other employment. Owners effectively create their own jobs (even if many of them technically are self-employed).

SCORE is working toward a goal of creating a million businesses by 2017. SCORE has received funding from the Deluxe Corporation Foundation to help achieve this goal.

Solutions
Pundits blame the current job situation on a host of things, from the world economy to Bush. Ask any small business in the U.S. and they’re likely to give similar responses on where to place the blame for anemic job creation, regardless of their political persuasion:

  • Too much government regulation -- government at all levels continues to impose regulations, usually with the noblest intentions. However, the cost of compliance is onerous and deters business owners from taking on additional help. Many microbusinesses are afraid to hire even their first employee because of the paperwork, complexity, and cost of compliance.
  • Uncertainty about taxes in the future -- temporary tax extensions (in some cases through the end of 2011, in others through the end of 2012) mean that making financial plans is virtually impossible. For example, it is unclear whether Obamacare will be upheld in the U.S. Supreme Court as constitutional (the issue likely will end up there, but when is uncertain). If the law is constitutional, then businesses with 50 or more employees will have to provide coverage starting in 2014 or pay a penalty. At this time, companies with payroll of around 50 may be loathe to add employees because they just don’t know what their costs will be.
  • Limited access to capital -- while banks have money to lend, access to it continues to be denied to too many small businesses. Lending standards have not eased up enough for businesses that have struggled to survive these past few years to qualify for funds.

Thus solutions for job creation are less government regulation, certainty about taxes, and more access to capital. This winning combination will drive small businesses to create jobs, which in turn will inspire consumers to feel secure enough in their jobs to spend money. Businesses will grow as a result of more consumer confidence and spending, so even more jobs will be created. There’s nothing new or innovative in these remarks; they just need to be repeated frequently.