On 24th February 2009, in his first major speech, Obama ballyhooed the economic stimulus plan, “The American Recovery and Reinvestment Act is now law. Over the next 2 years, this plan will save or create 3.5 million jobs. More than 90 percent of these jobs will be in the private sector, jobs rebuilding our roads and bridges, constructing wind turbines and solar panels, laying broadband and expanding mass transit."
One year has passed. One year remains.
The number of bills, turning into acts, is growing. Each bill passes with the music of job creation. Barack Obama pledges to generate jobs, again and again.
Peep into the brilliant bills
On 18th March 2010 President Obama signed first job creation bill having value of $17.6 billion with the intention to provide tax break for businesses and to fund the highway and the transit spending.
Alabama House also approved a job creation bill called ‘Reemployment Act of 2010’ on 6th of April 2010. It would allow companies to have a state income tax deduction of up to 50 % of the gross wages paid to any person who is currently drawing unemployment benefits or with expired benefits.
The Local Jobs for America Act is yet another persistent effort in job creation. The legislation will directly save or create one million jobs for teachers, police officers and emergency responders. In addition, over the next two years, the bill would put another 750,000 Americans directly to work in the public and private sectors.
The Startup Visa Act of 2010, allows an immigrant entrepreneur to get a 2-year visa if an investor is willing to grant $250,000, the minimum amount for the startup venture of the immigrant. The sound of bill is promising. These new small companies would employ minimum 5 people over a period of 2 years, a small drop to make the sea.
The above-mentioned small bills pacify the path taken. A small company creates more jobs than a bigger company does. The government should boost entrepreneurship among the US citizens. Sanction them loan. Create new, needed and recession proof businesses. It is happening. Believe it, have a breath of relaxation.
On 24th February 2010, The U.S. Senate Majority Leader Harry Reid proposed a $15 billion job bill which includes tax breaks for small business on hiring new workers and grant tax credits for up to $250,000 in capital expenditures for 2010. The approved bill known as the Hiring Incentives to Restore Employment (HIRE) Act would save or create 1.3 million jobs.
Small Business Job Creation and Access to Capital Act of 2009 intends to increase the loan limit and provide low interest rate for refinancing. This bill can create or save 200,000 jobs. This bill values those 27 million small businesses in the US that supply almost a trillion dollars to the financial system, create 66% of new jobs annually, and build up more than 50 % of the U.S. workforce.
Peep into the verticals, the immigrant entrepreneur and the new startups by US entrepreneurs should focus on to create jobs in US.
Healthcare: The healthcare reform bill is a boost to Indian IT sector. It will create in all probability more jobs in India. In US the cost of human resource to implement healthcare reform is high. It is economical to outsource the services offshore. Qualification, skill sets and experience can’t be cultivated quickly. Else the other option remains is to train people; add more to the cost and workload. Neither big companies, nor small companies would go for it. Jobs created by the healthcare reform are skeptical. An entrepreneur should see the opportunity to open shops in US for the implementation of reform to generate the lead and touch base with client regularly and offshore the work to India or China to meet the deadline. Telemedicine, robotic surgery, genetic engineering or other niche areas of research and development in healthcare and life sciences will always be an opportunity to explore and conquer.
Automobile: The breathlessness in the US automobile industry began in 2005. The big three were under pressure in the shrinking market and decreasing profits. Wages and health plans were the added burden. Bankruptcy was inevitable. The rising gasoline prices hinted and demanded a shift in the transportation style. Tata, India and Geely, China bought a few portions of Ford. Innovative commuting operations, fast transportation techniques, and high fuel-efficient vehicle are the need and necessity of future: a golden opportunity for entrepreneurs to innovate and cater to the world market need. There is a world petroleum crisis. It’s decidedly profitable to put cars out of street.
Retail: Apple and Amazon are the high performers in the US retail industry. Apple launched iPad and own stores. Amazon grabbed market share. Pricesmart offered bargains – something a common man would brood on to save cost. Netflix cashed on the online digital stream. In the fashion retail Buckle and Urban Outfitter followed a strategic move worth studying. Buffalo Wild Wings, BJ's Restaurants, Chipotle Mexican Grill and Texus Roadhouse performed around cost ideas only. Wal-Mart is in India, working in collaboration with Bharti and poised on reinventing the farming processes.
Manufacturing/Construction: The manufacturing industry is struggling more than the construction industry. The infrastructure bill will create jobs. DuPont, Sony laid off two years back. Job creators in March -
Information technology – Adobe, 3M, Alcatel Lucent, and AT&T had laid off people in 2008. For long, Apple has been innovating products, marketing and selling techniques to make money. Bing, Twitter, Facebook are working probably because psychologically people would like to connect more in times of insecurity. (This is the opinion of author). Obama government has taken the step not to provide any tax break to US headquartered companies, having subsidiaries overseas to make profit. Google, Intel, General Electric, Hewlett-Packard, and fortune 100 companies fall in this category. The change in plan, revealed by Obama is to prevent US firms from enjoying foreign tax credits on income that is not subject to US taxes.
Pharmaceuticals - Why an immigrant would set up shop in US when research and development in his or her own country is cheap? For a US based entrepreneur investment in drug discovery, innovative and alternative drug development methodology would surge the cash flow in long run. Scientific community is recession safe.
Entertainment – Not only India and China are emerging markets for Hollywood movies, they testify the surge of new talent. Oscar winning movie Slumdog Millionaire, Reliance and Steven Spielberg tie up has shifted the aptitude. Avatar did a business of 6.7 crore on the opening day in India. Oprah Winfrey show is coming back with the travel show targeted in India and China.
Hospitality – Hyatt is setting shops in India.
Agriculture – Food, cloth and shelter are the necessity. Strong agriculture roots of country will always prove beneficial. Startup in agriculture will survive and remain in demand, no matter what and open the linked restaurants
Health and spiritual growth – In this time it’s important to be happy and at peace and focus the mind. The healthy mind will provide ability to think creatively. The business of calm mind, healthy body and soul is booming in the world and it is something that can work for new ventures too easily.
Investment industry need to revamp and come forward, listen, and groom the ideas. A previous study done in job creation sector-wise is of utmost importance to come up with more ideas.
How many presidents in the history have created jobs? Every president of US has created jobs except President Herbert Hoover. The great depression had skirted his tenure from 1929-1933 : 44% banks went out of business, the job market growth drowned to -6.4% and average household income fell by -9.0%.
1993-2001, Bill Clinton created highest number of jobs, 11.3%.
Clinton created jobs by investing in education, health care, science and technology. He opened foreign markets for the US products. The low inflation rates, increased wages and higher percentage of homeownership boosted economy.
2001-2009, in the decade long tenure of George W Bush, the job creation was negligible.
In 2001-2005, it was 0.01%, the least in the statistics of the century. 2005-2009, it was 1.1 %, again very low. The rise in average annual household income was 0.002% to 0.2% - the lowest amount in the century.
President Obama needs to convert -4.0% of job creation field into a positive number. The graph above reflects that Obama inherited a decade of stagnant job creation and stagnant rise in average household income percentage.
$787 billion stimulus could have created 787000 millionaires in US. But, running the economy of banks runs the future economy of every household in US and to a greter extent globally too.
It’s important to create decent jobs, not jobs.
A study by Jeannette Wicks-Lim of Political Economy Research Institute, University of Massachusetts, Amherst, September 2009 states the need of creating decent jobs in the US. Obama has made note of this point too. Amendments are preening the labor unions to come back in the organizations.
Signs
Job creation done in April and May 2010 will reflect the continuity of positive signs in the graph of employment. March had a number of 162,000 after a long two years.
Obama and his team is working hard, taking every minute step to create jobs. New reforms based on new strategic moves, old footsteps taken by Franklin Roosevelt to create large number of jobs after the great depression, and steps of Clinton.
Believe it or not, Obama is creating jobs in the US. An entrepreneur should enact upon the long-term business opportunity. He is eyeing every opportunity.
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