Phil Hauck's TEC Blog

Monday, February 22, 2010

Job Creation Stimuli from a Business Owner Viewpoint!

Both state and federal government officials are developing plans to spur job creation given the current economic doldrums, and we hear what the politicians ideas are. But what do business owners, who actually create the new jobs, feel would help them expand?
Following is a list of ideas provided by about 20 Green Bay area CEOs, members of TEC CEO groups, that they feel would help them.

1. Keep as much money in people’s pockets as possible so that they can buy ... and provide an environment that stimulates them to buy. Don’t take our markets away! When people feel that tomorrow will be better than today, when the uncertainty about tomorrow is replaced by confidence, they will begin buying more goods made by our companies. (Consumers drive about 60% of the economy; capital expenditures (see #3, below) drives the rest.)

2. Eliminate all business taxes except usage taxes. The business is the “golden goose” whose efforts eventually create jobs. Taxes on businesses take dollars away that could be spent on job-creating efforts. The business of a business is to fulfill a customer need/want. They should not be impeded unnecessarily in doing that. Taxes should be paid by people, not job-creating enterprises. (This includes taxing of inter-state services.) Dollars not used for taxes can be used for R&D, new product development, seeking new customers, increasing manufacturing capability ... and hiring new workers!

3. Re-institute Accelerated Depreciation, which will incent capital expenditures which fund capacity expansion which drives down prices. The Institute for Policy Innovation estimates every $1 of depreciation deductions generates $9 of output growth.

4. Insure a supply of trained workers ... by providing grants for training/re-training, or funding technical schools to do that training/re-training.

5. Invest in new infrastructure ... infrastructure that is key to tomorrow’s competitiveness (broadband, etc.).

6. Reduce the costs of Regulation. Regulation is important ... it assures minimum standards. Regulation should be cost-justified against the benefits. Example: Eliminate multi-state duplication of licenses.

7. Corollary: Reduce/Don’t Increase the administrative and tax costs of having an employee. This is why it’s important to control rises in Health Insurance, Social Security, Medicare, and other societal benefits.

8. Corollary: Increase/Don’t Reduce the incentive to work. Insure it’s not more beneficial to collect Unemployment Compensation than to work for available wages. Keep a large differential between them.

9. Don’t play favorites. Keep the playing field level.

10. Provide grants to incent basic research which might lead to development of patentable, commercializable ideas.

11. Stop creating uncertainty around interest rates, availability of capital, and costs of employing workers. This uncertainty results in postponed expansion efforts. Control interest rates at low levels and without volatility to reduce barriers to capital investment borrowing.

12. Foster globalization. Don’t impede it. All economics is about Comparative Advantage. Let everyone do what they do best, and let the buyer/user judge whether to buy/use or not. Many of America’s jobs depend on export business.

-- Phil Hauck is chair of three local TEC CEO Groups.

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