State of the Union Gives Reason for Hope on the Job Front

by SixFigureStart | January 28, 2010

  • My Vault
Among the many issues addressed in last night's State of the Union address, it was refreshing to see President Obama spend so much time on the concept of job creation. It's no secret that we're in trouble here, and that serious measures are needed to right the ship. For all the talk of the deficit in recent weeks, the major concern of many who still have the luxury of a job to go to right now is whether it will still be there in the coming weeks and months, while those without one are facing greater competition than ever before to find new ones. Still, as the President pointed out, it could have been worse, had it not been for the Recovery Act:

President Obama; State of the Union"Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. Two hundred thousand work in construction and clean energy; Three hundred thousand are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, first responders. And we're on track to add another one and a half million jobs to this total by the end of the year."

Now, we all know that the business of making employment projections is fraught with peril, but let's assume that President Obama is on the money this time, and 1.5 million jobs actually get added back into the economy this year as a result of the Recovery Act: that would still mean the restoration of less than a quarter of the 7 million or so positions lost since the onset of the recession. Dire stuff indeed.

Of course, the President was talking only about jobs created as a result of the Recovery Act, meaning that there's still the potential for more to follow from the private sector—especially if Washington can get around to enacting some of the other job creation policies mentioned in last night's address:

"I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat.

I'm also proposing a new small business tax credit?-- one that will go to over one million small businesses who hire new workers or raise wages.

While we're at it, let's also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment."

Should all that somehow find its way into legislation—and further proposals on investments in energy (nuclear, expanded oil and gas exploration, alternative energy research) and infrastructure building come to pass—there's some reason to hope that jobs will follow. And, unlike temporary jobs created as a result of government works programs, there's a strong possibility that jobs created by growing businesses will still be around several years from now. For that reason, the President's speech struck the right tone on prioritizing employment creation (at least to this observer). Whether his Washington colleagues can agree long enough to turn that rhetoric into action remains to be seen.

--Posted by Phil Stott, Vault.com

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