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The Wright Perspective℠

Social Commentary from the C-Suite to Main Street℠

A Blog by Gary Wright II

How is politics killing our job growth?

Thursday, September 6th, 2012

How is politics killing our job growth? One word: Uncertainty! I'm a small business owner, so I can speak from first-hand experience. The overwhelming majority of large companies are doing just fine. They have record profits, and they are hoarding tons of cash on their books. Big business usually doesn't pay much attention to their employees or customers, they only focus on their shareholders. The saddest part of that is the fact that if you focus on your customers and employees, the shareholder values falls right into place. You create a lasting business value, not a temporary state of bliss based on quarterly results. You don't measure true success in quarters, they are just guideposts to keep you on the track to long term success.

Since big corporations are doing just fine, my expertise is with small businesses, and small businesses create most of the jobs - I'm going to tell this story from a small business perspective. When I write a business plan, it covers at least five to ten years in advance. There are lots of variables involved, and it often involves lots of projections and guesswork about the future. Some variables are pretty easy and rarely change. Example: Minimum Wage. Other costs are much more unstable and unpredictable. Every time a politician adds to the uncertainty of our future, like oh, let's say by repealing tha Affordable Care Act, it makes many of the variables incalculable and businesses automatically put a freeze on hiring new employees. It turns what are usually known values into a shot in the dark.

Some costs are under a business owners' control, while many others completely rely on external forces. Can a business control the cost of their inventory or supplies - not really. Can they control the costs of each employee? To a great extent, yes. By freezing hiring and keeping their head counts low, they are essentially able to affect the total costs of their labor. This can be used as a temporary tool to bring the numbers in line with projections, but long-term it can be greatly detrimental to the business. Morale is immediately driven down, and you burn out your workers by asking them to constantly achieve more productivity with fewer and fewer resources. It's actually pretty simple: If we ever want job growth to return, our politicians have to stop creating more and more uncertainty about the future.

Once a business owner is able to make reasonable projections of future costs, two other elements will have to also be addressed: The first is the competitiveness of our workers, and secondly, their skill sets must match the requirements of the job. In the current job market, I can outsource many of my jobs for around $5 an hour. This includes a foreign worker who holds a college degree, speaks English, and who is more productive than most American workers. That rate also includes the price of the consulting or hiring firm in their home country. It is simply impossible for an American worker to compete with that, so we have to use our creativity, productivity, and other skills to win these jobs back. We can't succeed if we are burning out all of workers, and when our employees spend most of their working hours on Facebook, out smoking, or standing around and BSing with their coworkers. The good thing is that we can fix this problem without spending any money on it, we just have to return to "an honest days work for an honest days pay." Business executives can't expect workers to do an honest days work, while exploiting their workers and not giving them an honest days pay. Minimum wage is not an honest days pay and no one can be expected to live on the minimum wage rate. We have to do better than that. We also have to make sure prospective employees are able to fill out a job application, prepare a resume, and make a good impression during a job interview. The skill set mismatch is going to take a longer-term solution, as we must educate and train workers in jobs for the future. We can't do that if we can't afford to send our kids through college.

In order for my business to survive, we are running with a tiny crew. For last year, we had a total loss of less than $1,000, which in this economy is pretty damn good. I have enough work needing to be done to add three full-time employees, but not until I can predict future labor costs with any certainty. Instead of outsourcing the jobs, I made the difficult decision to not grow the business just so I can keep the jobs here in America. Not many business owners in America are willing to make that sacrifice, which is why we've seen a mass exodus of jobs to other countries.

If we are ever going to return to being a great and prosperous country, we have to put an end to all of this obstructionism and political sabre-rattling. We've got to learn to put all of our differences aside and work together to rebuild the country that we all love and cherish. Not just for our own well-being, but so our future generations will be able to build upon the solid foundation that we must now so urgently rebuild. I hope to see you at the polls on election day!

Best regards,

-- Gary Wright II

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