If you’re looking for a job, heading to the job advertisements either in the local paper or one of the big job boards online seems like the right thing to do. That probably isn’t the best place, though. The government knows something very important that many job seekers don’t. They know that most of the jobs come from small businesses and that’s why the new Obama jobs plan aims all of the economic firepower towards small business owners.
If you watched his speech and the subsequent discussion, you know that two out of every three jobs created comes from a local business in the community where you live. For this reason, you next resume may want to end up in the hands of a business down the road but is the new jobs initiative really going to help?
The REAL reason Washington Cares
It would be unfair to say that there are ulterior motives at work when it comes to all of the talk about job creation. Certainly, there are plenty of Congressional members, White House staff, and President Obama himself who have a sincere interest in not seeing Americans suffer through a crisis, but there is another reason that getting you back to work is so important in the year leading up to an election. Politicians know that the higher the unemployment rate the less likely they are to be re-elected. Although some of the reason for the high unemployment probably comes from natural economic cycles that are out of the control of Washington, no sitting Washington politician wants you combing through job advertisements every day. It’s not good for their job either.
Small Businesses are Hiring?
Since the 1990s, small businesses have created two out of every three new jobs. It’s not the big corporations that are likely to create your next job. New York Times columnist and best-selling author Tom Friedman recently said on a CNBC interview that there are too many people waiting for a big company to arrive in their community and put everybody to work. He went on to say that those days are over. This is why President Obama is attempting to stimulate small business hiring. The chances are statistically high that your next job will come from a business that employs less than 500 people.
Will it Work?
In the short term, it may help but the underlying problems may prevent lasting change. Newsweek recently interviewed a business owner who makes parts for RVs in Cleveland, Ohio. He said that business had returned and as a result, he hired eight workers but each of those positions was temporary jobs.
His reason for not hiring full time employees? Because, according to him, the economy could crash at any time sending his sales plummeting. The cost of steel and other raw materials could rise almost overnight sending his margins down. He can’t make full time commitments until he sees evidence of a stable, recovering economy instead of an economy still in the middle of a storm.
The National Federation of Independent Business, a trade organization representing small business owners, conducts a survey gauging owners’ confidence in the economy. Since January of 2011, there has been an 18% drop in the amount of small business owners who believe the economy will improve over the next six months.
Tom Friedman later went on to say in the same interview that now may be the time to take a marketable skill that you have and start a business of your own. Our economy is at a place where the job advertisements are not going to come to your rescue. Start a business of your own or get some training that will allow you to qualify for the many unfilled jobs that require specific skills.
It’s never too late in life to start something or learn something new. If Obama has his way, small businesses will start a hiring frenzy in the near future but that doesn’t help you right now and even if this plan makes it through Congress there will still be more job seekers than job makers. What’s your talent? Go after it!