During the last year, the
When the Obama administration was spending day after day trying to convince the American public and congress why the health care bill should be passed, his administration should have been working with small businesses to create new jobs. With 87 percent of American workers employed by small businesses, this is not a small issue. I don’t disagree with the notion that we need a better healthcare system in
An employed worker pays income taxes. Taxes are what pay for the cost of our government. Ironically, it is the federal government who has been one of the strongest employers over the last year. How can we pay for bigger government and the numerous new social programs the administration is touting without more taxes?
That is the conundrum.
Some industries have done well during the last year. According to Sageworks, Inc. a
Businesses in these industries have done better than others. Presumably an increase in sales means employment has increased or at least not decreased.
There is some evidence that employment in small businesses has increased during the last year.
Intuit’s Small Business Employment Index for March 2010, an index that contains nearly real time data reflects a modest increase in jobs for the month among businesses employing less than 20 employees:
- Nearly 175,000 new jobs created since mid-2009 and 50,000 new jobs in March.
- This is important as small businesses often show the first signs of an economic rebound as they begin hiring earlier than larger businesses.
- Compensation however has remained flat since Sept. 2008, with average monthly compensation equal to $2,562 for March.
On March 18, 2010, President Obama signed the HIRE Act which is supposed to help stimulate job creation in small businesses. While this legislation is welcome news to small business owners, many believe it is a year late in being enacted.
The HIRE Act will provide nearly 19 billion dollars in tax credits to small businesses that hire and retain qualified employees. The Act is divided into several main pieces. It provides a payroll tax exemption to employers that hire an employee between March 19, 2010 and December 31, 2010. It also provides for tax credits for retaining employees that are newly hired. It is too early to see how this legislation will really affect small businesses in
There are a number of businesses that do have encouraging stories to tell.
While these encouraging stories of job creation in small business help demonstrate that our economy is recovering, we still have a long way to go, and the administration needs to get out and spend time with small business owners so they can really understand how to create jobs in
Sam Thacker is a partner in Austin Texas based Business Finance Solutions.
You may contact Sam directly at: firstname.lastname@example.org
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