Recession still far from being over; job creation must be part of efforts
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The economic recession is not over.
Despite what guests on various talk shows have been optimistically stating for months (without substantial quantitative data to support their claims), the fiscal state of country is still in a slump.
In fact, more than 1,200 NASA employees who have worked on the shuttle program since it started in the early 1980s will be laid off on Oct. 8.
Even though Congress recently passed a $19 billion budget for NASA, it is not enough to keep the agency from laying off its workers.
Even more ironically, 85 Minnesota job counselors (people whose jobs are to help others find jobs) were laid off last week when stimulus money used to pay their salaries ran out.
The national average for unemployment is currently at about 9.5 percent. To bring down these numbers, the president and the federal government have been trying to force jobs into the economy with the stimulus program.
As is the case with the job counselors though, many stimulus-funded jobs are temporary at best.
With enough stimulus money, the president could give every person in America a job. The government could pay everyone to count how many clouds are in the sky every day. The cloud counters would all earn enough money to support their families.
Many jobs created by the stimulus program are “cloud-counting jobs” that is, they are filler jobs created for the sake of providing someone with work. They do not have a real benefit to society.
If these jobs don’t serve a purpose by meeting a demand in society, once the money to pay the salaries runs out, the jobs are gone, leaving people unemployed.
How then can jobs with substance be added to the economy?
According to The Washington Post, “It turns out that entrepreneurship (essentially: the founding of new companies) is crucial to job creation.”
Real jobs come through supply and demand. Entrepreneurs create a demand for a product or service and then create specific spaces to be filled by employees.
According to The Post, older companies create jobs too, but they also lose them, such as when a company goes out of business.
Jobs added and lost by existing companies basically cancel each other out.
“All the net job increases occur among startups, finds a study of the 1992-2005 period by economists John Haltiwanger of the University of Maryland and Ron Jarmin and Javier Miranda of the Census Bureau.
The article went on to say that, because most startups are necessarily small, these tinier firms have a statistical edge against bigger businesses, but the effect entirely reflects the impact of new business.
If the administration really wants to create jobs as it proclaims, all it needs to do is set up an environment where business can prosper.
This could mean lower taxes, fewer restrictions and greater incentives for entrepreneurs.
Many times, the government tries to fix every economic problem by force when, sometimes, it just needs to stand back and get out of the way.
The government has to be nurturing to start-ups in the business world if it wants to bring real job growth into the economy.