“This is our recession, this is our challenge and, more importantly, this is our opportunity.”
Georgia Labor Commissioner Michael L. Thurmond
Opportunity may seem a strange word to use during a time when Georgia is struggling with record-high joblessness. Success, though, is often born of counterintuitive effort. That holds true for businesses, states, regions and even individuals. Thinking beyond tomorrow, or even the next fiscal year, can help us embrace a mind-set that will get Georgians back to work as the current hard times gradually moderate.
Creating new jobs, and buttressing existing ones, is critical for Georgia. The state Department of Labor reported last week an unemployment rate of 10.3 percent for December, reaching again a record high first set in July. That means a half-million Georgians are without jobs.
Reducing that number will require innovative, sustained effort. At minimum, the state should keep programs that retrain jobless workers and provide incentives for employers to hire them.
Legislators must also look at new ways to foster job creation.
Again this year, elected officials have suggested tax cuts as a main driver of economic growth and jobs. Keeping taxes competitively low is part of the solution, but not the entire package. We need both broad, scattershot strategies and precisely focused tactics in our jobs arsenal.
Wide-ranging tax reductions should be viewed alongside falling state revenues that will force another billion dollars-plus in cuts for the remaining half of the current fiscal year. That comparison should give legislators pause, at least for the short-term.
Yes, smart tax cuts can aid some growth, such as targeted credits tied to creation of specific jobs. They don’t help as much in the here and now, though. It takes time for the small, or startup, businesses that create most new jobs to apply credits toward their next tax bills.
In their quest for jobs growth, legislators should look hard at allowing state pension funds to invest in venture capital efforts that fund entrepreneurs and their new, or expanding, companies. Allocating at least a small percentage of the state’s holdings toward this arena will help Georgia attract, and keep, young upstart companies that have the potential to create new jobs.
Targeting some money toward efforts such as those outlined by the Metro Atlanta Chamber’s New Economy Task Force can help lure high-paying, high-tech jobs and companies. That gets people back to work, and not just in lower-wage positions.
Other states already allow such investments. Georgia, which advertises its pro-business stance far and wide, should join those ranks. Doing so will also send a positive signal to the state’s high net worth individuals. Their seed cash is badly needed by entrepreneurs in Atlanta and across the state.
Hard-core business advocates might be tempted to keep their money in a mattress these days, given the deficit-meter that keeps rising in Washington. All of us will be paying for stimulus spending and the like for a long time. Even so, the most successful investors and businesspeople are those who shun the herd and the clearly marked paths.
Ervin Williams, entrepreneur in residence at Savannah State University, said last week that, yes, “the uncertainty in Washington ... is keeping people on the sidelines. But, there are others who look at this and say ‘this is when the great businesses have emerged in the past’ — people who have strong ideas.”
“It’s in good times that bad businesses get funded and it’s in bad times that good businesses get funded,” said Williams. Entrepreneurs, and their backers, understand that risk rises alongside the potential for big returns.
A willingness by the state to bear at least a small portion of this risk-reward equation will set a hopefully profitable example for other investors, and for Georgia. Doing so will help create new jobs and businesses in the Atlanta region and across our state. It will also speed growth and hiring at existing companies that are willing to make calculated risks about a brighter, more-profitable, future.
Andre Jackson, for the Editorial Board
In coming weeks and months, we will look at major issues Atlanta must address in order to move forward as the economy recovers. Look for the designation “Atlanta Forward,” which will identify these discussions.
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