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Is There a Recipe for Creating Jobs?

Zane Safrit Small Business Trends

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April 28, 2009

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I don’t know of one. Do you? Who knows what the right mix of savory ingredients are that’s needed?

Surely, (Shirley…) if someone did have Grandma’s Guaranteed Recipe for Job Creation we would know about it. ( It’s just so easy to make and takes only a few months. Wow, is IT good, too!!! You’ll love it. ) Given the reach of social media and the painful need for job creation in our economy and the global economy, if there was such a recipe shared digitally, somewhere … someone would have blogged about it, tweeted about it, Facebook’d it, YouTubed it ….

We would have heard about it.

So, what is the right mix of savory elements? What’s the recipe?

LOWER TAXES.

Yep. Everyone says Lower Taxes. Lower the taxes and we’ll have jobs galore.

Makes sense, too, at first glance. Lower taxes mean more money left for the business’ cash-flow to invest to expand their business.

But this may be the sugar-cookie equivalent of an economic policy. You know sugar-cookies. Put in enough sugar and presto … you have a cookie. Here it’s lower the taxes enough and presto you have a job-producing economy.

The recent unemployment reports compared to states’ rankings on favorable tax systems for business don’t support this simplistic economic plan. There are too many contradictions between states with low taxes and high unemployment, and states with low unemployment and comparatively high taxes. Here are the two most recent reports:

Bureau of Labor Statistics: Unemployment Rate for March, 2009

2009: Best to Worst State Tax Systems for Entrepreneurship and Small Business, from the Small Business and Entrepreneurship Council.

The states with the worst ratio of favorable ‘tax systems’ to high unemployment rate were:

STATE                            Tax System Ranking                       Unemployment Rank (highest)- Rate
South Carolina:                        11th                                                                 3rd - 11.9%
Nevada                                       2nd                                                                 7th - 10.4%
Washington                                4th                                                                   16th - 9.2
Mississippi                               12th                                                                  14th - 9.4

The states with the best ratio of unfavorable ‘tax systems’ to low unemployment rates were:

STATE                             Tax System Ranking                     Unemployment Rank (Lowest) - Rate
Iowa (home state)                  7th Worst                                                          5th - 5.2%
North Dakota                          16th Worst                                                    LOWEST - 4.2%

COMMUNITY.

Richard Florida, author of The Creative Class, offers a rich gumbo recipe to create and sustain job and economic growth. His recipe calls for a diverse community of citizens that include artists, merchants, crafts and trades people, big business and small, a livable community with clean air and water, and a variety of industries whose phases of growth and decline are balanced by that of the others. Good school systems are important, also, in attracting the top talent (and their families) needed to grow a business.

Jack Schultz from Boomtown Institute recently shared the story of one major brand’s decision to leave their home community. The problem wasn’t location. The problem was the community’s decision to not invest in their public schools. The schools were failing. Failing schools made it impossible to recruit the top talent. The company moved to another community with strong community support and funding for their schools. The needed talent arrived. The company grew.

INFRASTRUCTURE.

That could be key. Roads, bridges, airports, bandwidth. Not just the jobs to build, improve or replace aging elements of our infrastructure. No, the key is what happens afterwards. Unimpeded trade, access to talent and resources, access to ideas, communication, collaboration.

Kare Anderson of Say It Better recently shared how it’s important be able to effectively communicate in order to collaborate. Communication means bandwidth, sure. It also means being able to visit and meet the customer or prospect or partner in person. And reach your market, efficiently.

A recent article in the NY Times discussed how a bridge over the Hudson River was key to the Industrial Revolution’s success and the jobs it created. The bridge is being rebuilt. The result is a new economy being innovated with new jobs needed to drive it.

Staying with the recipe metaphor, infrastructure may be the oven where all these elements can be cooked slowly to create a savory dish of sustainable trade, communications that result in collaborations, economic growth and job growth.

HEALTHCARE.

The corollary seems as obvious as low taxes = job creation. Healthy citizens are productive citizens. Healthy citizens allow resources to be used for job growth, not the after-effects of a lack of affordable healthcare. For me, that makes healthcare infrastructure project #1.

On the other hand, I cannot find the data to compare uninsured rates and health-care events vs employment rates. That is a statistic whose time has come to share. And like vegetables, we need a regular diet of good data in order to make data-based decisions.

INNOVATION.

One report shows that investment in innovative green energy technologies ( solar, wind, geothermal, etc) can generate 4 times the number of new jobs as a similar investment in carbon-based energy sources. The key point there is investing in innovative technologies creates jobs.

ECONOMIC AMBROSIA.

Growing up, ambrosia was a dish always served at Thanksgiving dinner. No one liked it. But as kids we ate it, or pushed it around our plate.

Purely partisan debate, with a heaping dose of ideological rigidity, is our country’s ambrosia dish. And instead of once a year, it’s served daily now. The only question is why we keep eating it or pushing it around our plates.

If someone has a recipe for creating jobs, please share it. Now’s the time. We need heroes. Your recipe could make you one.

In the meantime, let’s be our own heroes. Let’s collaborate to communicate, moving from me to we as Kare Anderson says, all the while creating our own recipe for creating jobs (without the ambrosia).

* * * * *

About the Author: Zane Safrit’s passion is small business and the operations’ excellence required to deliver a product that creates word-of-mouth, customer referrals and instills pride in those whose passion created it. He previously served as CEO of Conference Calls Unlimited. Zane’s blog can be found at Zane Safrit.