Create Jobs by Helping the Small Guy

In a volatile marketplace, the engine of American business — small businesses — are hurting the most. Mom-and-pop stores are successively closing, and surviving businesses continue to survive only by cutting resources and personnel in half. For a country struggling with unemployment, the destruction of small enterprise is more costly than one might imagine. To help curb the rising unemployment numbers, America needs to focus on employer businesses and entrepreneurial ventures by introducing an environment that favors the little guy.

According to the Small Business Association (SBA), those often shut out of a normal job market (minorities, women, mid-career professionals, and people with disabilities) customarily start their own entrepreneurial ventures or are employed by a local small enterprise. Due to the recession, individuals who normally struggle to get a job in a favorable climate have even fewer opportunities. With rising unemployment numbers, the continued elimination of small ventures hurts the American public more than any other sector. The SBA defines a small business as “a company of 500 or fewer employees.” Surprisingly, these endeavors compose most of America’s economic activity, despite their limited influence or focus.

Traditionally, entrepreneurs represent 10.5% of U.S. employment, and in 2007 alone small businesses embodied 99.9% of the 27.2 million U.S. businesses. The recession, however, hit these enterprises hard due to stalled growth and limited access to credit. By forcing businesses into survival mode, many companies cut personnel and assumed a lean and limited staff to subsist. Now, with the economic climate static and slowly gaining momentum, businesses have yet to take the next step towards pro-active repair – namely, robust hiring.

A selection process, also known as natural selection, was set in motion during the recession. Only those willing to cut their teeth in a tough market, or transform their modus operandi, survived. Those who endured the collapse did so by finding inexpensive ways to run their companies. Despite all the doom and gloom of lay-offs, many businesses were able to find creative ways to sell their services or commodities, often tapping into unsought niches. A few even saw a rise in profits due to their resourcefulness, but they are still uncertain and unwilling to expand or gamble on increased hiring. Instead, many offices are pushing their core staff to new heights in lieu of hiring new talent. 

To encourage creative thinking and spur innovation, America needs to promote and support small establishments. The federal government should refocus its attention on new ventures by minimizing the repercussions that can befall a small business when mistakes occur. In a tough economic climate, people are fearful of taking risks, but through incentives and safety nets the small business sector can once again be galvanized.

To jumpstart the small business sector and curb rising unemployment numbers, employers need to take risks in a risk-averse climate, especially by starting their own ventures and hiring the out-of-work. The American entrepreneurial spirit is not dead yet, and the creation of new, small business ventures should be promoted and encouraged. Pushing a political agenda that endorses smaller companies will reach those people, who are in need of jobs.

Photo Credit: TaxBrackets.org