WHEN IT COMES to creating jobs, everyone has an opinion.
On Thursday, about 130 small-business owners, financial experts, union leaders, economists and CEOs from across the country convened at the White House to discuss their best ideas for stimulating job growth — and staving off another uptick in the unemployment rate, which climbed to 10.2% in October.
While many small-business owners and advocates welcome the attention being paid to boosting employment, there were plenty of skeptics in attendance. Some complained that sustained economic recovery — not new jobs bills — are needed to kick-start hiring. Others pointed out that job losses have already moderated in recent months, and called into question the necessity of any moves.
Raymond J. Keating, the chief economist at the Small Business & Entrepreneurship Council, a lobbying group in Oakton, Va., didn’t attend the event, but criticized proposals for another round of stimulus or tax credits. “Adding people to the payroll when you don’t know what is going to happen on the health-care front or on the energy front, doesn’t make good business sense,” says Keating. “It’s PR in the midst of a tough economy.”
What was on the table? Here is a look at some of the most-discussed ideas, from bolstering green jobs to launching a public works program.
Work-Share Tax Credit
A jobs-sharing initiative, which already exists in 17 states, has gained traction among several members of Congress. In August, Rep. Rosa L. DeLauro (D., Conn.) introduced the Keep Americans Working Act, which would allow employers to reduce their employees’ hours in order to hire new workers to pick up the slack. Although employees’ hours would be reduced, their pay would remain the same, as the government would pay the balance. Notably, Paul Krugman, economist and Nobel prize winner, also backed the work-share idea.
Despite this interest, small businesses may chafe at the plan. Micro-businesses (firms with fewer than 20 employees) would likely be left out, says Dean Baker, a co-director at the nonpartisan Center for Economic and Policy Research in Washington, D.C. “Presumably, you would want to aid firms other than ones that employ close friends and family members,” he says. “Having a certain size minimum makes it more difficult to come up with some scam.”
Jobs Tax Credit
By contrast, jobs tax credits are largely welcomed by small-business advocates and economists. One plan from the Economic Policy Institute (EPI), a Washington-based research organization focused on labor issues, calls for the government to provide refundable tax credits of 10% to 15% against payroll taxes for each new hire over two years. The credit is expected to generate three to five million jobs over two years, says Ross Eisenbrey, EPI’s policy director.
‘Cash for Caulkers’
President Bill Clinton and others have suggested a cash-for-clunkers style initiative that would task construction workers and contractors with weatherizing homes. By employing unspent stimulus funds, Clinton’s plan, popularly known as “cash for caulkers,” involves weatherizing houses and apartments, as well as commercial and industrial buildings. Depending on how many property owners take up the initiative, the plan could not only provide jobs to the hard-hit construction sector, it would limit carbon emissions and reduce owners’ energy costs.