By Gerald Sherman
Thinking out of the box is very helpful in business. It can give you a different perspective and an opportunity to see things in a different light. For now, I would like to consider the unemployment problem that has an effect on everybody today.
Let’s look at some of the statistics:
As of December 3, 2010 – Household Survey data indicated that the number of unemployed persons was 15.1 million in November 2010, (U.S. Bureau of Labor Statistics).
“Today we find that American companies are increasing hiring but oftentimes in foreign markets. According to the Economic Policy Institute, companies created 1.4 million jobs overseas this year but fewer than 1 million domestically. National Public Radio/The Associated Press (12/28/2010).”
In 2009, there were 24.7 million businesses in the United States, according to Office of Advocacy estimates. Six million companies employ personnel and about 18 million do not. Small firms with fewer than 500 employees represent 99.9 percent of the total.
Small businesses employ about half of U.S. workers. Of 120.6 million nonfarm private sector workers in 2007, small firms employed 59.9 million and large firms employed 60.7 million. (Source Commerce, Census Bureau, and trends from the U.S. Department of Labor, Bureau of Labor Statistics, Business Employment Dynamics.) In addition, Intra company transfer Canada transfers allow employees of international companies to temporarily work at a company’s Canadian branch for a period of up to five years.
One of my friends complained that her boss was giving her work that two people formerly performed. She said downsizing is being used by companies to show bigger profits. Cutting down the number of employees is being used to reduce overhead. That’s happening in the real world. Let’s start thinking out of the box and come up with dramatic ideas to find a solution to our country’s unemployment problem.
The government has made an attempt at providing inducements to employers who hire the unemployed in the Hiring Incentives to Restore Employment (HIRE) Act of March 18, 2010. But as you will see it’s not enough of an incentive for employers to make it significant in dramatically reducing the numbers of unemployed.
“The HIRE act states that employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive. In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker.”
I do not profess to have the answers but, I thought that maybe an “out of the box” idea might stimulate others to tap their brain power to get businesses motivated to do new hires. Let’s target the 50 percent of the 27.4 million companies and give them a reason to hire just one person. It would virtually eliminate the current unemployment emergency. But you ‘gotta’ have a program that stimulates the hiring process.
The question arises, why should big and small businesses hire additional personnel with today’s economic conditions? Let’s think what would motivate a business to do new hires? Incentives…Incentives…Incentives…
Here’s my ‘out of the box’ suggestion: Give each company that hires a new employee a generous tax write off. I would suggest 50 percent tax rebate based on the new employee’s gross salary during the first year, and an additional 25 percent tax rebate for each of the next two years. This might encourage many employers to hire. Of course there would have to be certain caveats. New hires must be retained for at least full one year to be eligible for this program. Also, if employers fire current employees to replace them with new hires without just cause during this period, they would lose the deductions and have to reimburse the government for any and all tax benefits they received.
Such a program may seem difficult to administer at first but, all new programs are. If we can get a person to the moon we can certainly find a way to administer it.
So what would the government have to gain? More tax money from the employees; Social Security contributions; more money will be spent by new hires’ less unemployment payments. It would be the best ROI by the government.
What are some of your ‘out of the box’ ideas? Send them to me or better still, send them to your representatives in DC. Let’s eliminate unemployment and let’s do it now!
Gerald J. Sherman of Sherman & Perlman LLC, Marketing is a Boca Raton-based, author, marketing consultant and public relations person who has written several books and articles on these subjects. http://www.shermanperlman.com jerry@shermanperlman.com