Helping businesses help themselves to create jobs -- Career Center Blog

September 18, 2011

Helping businesses help themselves to create jobs

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By Randy Woods
NWjobs

There's no denying that this has been a tough month for the idea that government can provide assistance in creating new jobs. In spite of a substantial rebound on Wall Street following the Great Recession, the unemployment rate still stands at 9.1 percent for the nation, 9.3 percent in Washington state and 8.9 percent for Seattle.

President Obama, as usual, has been unfairly labeled the scapegoat for the lack of job growth during the slow recovery. No matter what solutions he has proposed, it seems, he has been excoriated by both major parties for doing either too much or too little. Similarly, Seattle Mayor Mike McGinn has been a political punching bag lately -- first for his failed opposition to the downtown tunnel project and more recently for his support a federal $20 million home weatherization retrofit program that was supposed to create 2,000 living-wage jobs over several years but has netted only 14 to date.

But events of the past few weeks give me reason to hope there soon will be positive change regarding job creation in the region. On Sept. 8, Obama gave a televised address about his new $447 billion plan to spur job growth across the country. A week later, McGinn and several other city mayors took part in a White House conference call on Friday to pledge their support for Obama's initiative.

While most of the GOP presidential hopefuls are pointing fingers at Democratic ineptitude, neither Obama nor McGinn are backing down on their basic philosophy that government can play a useful, if indirect, role in encouraging more hiring. Crucially, Obama is including tools in his plan that have long been championed by Republicans, namely tax cuts and incentives for businesses.

Under the plan, businesses would receive a tax credit of $4,000 to $9,600 for hiring people who have been out of work more than six months and a $5,000 credit for hiring returning military veterans. Also, businesses would have their payroll taxes cut in half for the first $5 million in wages. In its initial analysis of the Obama plan, economists from Moody's Analytics say the incentives could create 1.9 million jobs nationwide and grow the economy by 2 percent next year.

So how does that translate to the average Seattle worker? If passed, here's what the $1.8 billion slated for the state of Washington under the jobs plan could do for job seekers:

9,600 jobs to complete infrastructure improvements on highways and transit systems ($741 million)
4,700 jobs to retrofit and build new schools ($365 million)
$628 million to preserve existing jobs for teachers, police and firefighters due to decreased state tax revenue through 2013

That's 14,300 potential new jobs in the state's struggling construction industry alone. In addition, more than $100 million would be supplied in competitive grants to revitalize local communities and fund community colleges.

"From transportation grants to housing loans, community development block grants to energy-efficiency programs, President Obama has helped Seattle create jobs," McGinn said in a statement following Obama's address. "We appreciate that he is out there fighting for us."

These actions may not be the silver-bullet answer to our job woes. Given the gridlock seen in Congress over the last year, it's unlikely that this proposal will pass through both houses unscathed. But by using the same rhetoric of the GOP opposition and potentially making more money available for consumers to spend, the all-important "X factor" in job creation -- demand for new jobs -- could finally start to rise, both nationally and in our own backyard.

Randy Woods writes about job-search tools, networking techniques and other tips to help you land your dream job.