Doing the math to fix unemployment

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Grace Ballor
Contributing Writer

Unemployment is on the rise, and President Obama’s solution is government-funded support for an increase in manufacturing jobs.  Working to “get America back to work,” the president has promoted the development of new industries like wind and solar energy as the solution for the unemployed.  Though well-intentioned, Obama’s faith in these “new industries” to create new jobs does not stand up to economic analysis.

First of all, the creation of a job in the wind or solar energy industry will likely result in the loss of a job in the existing energy sector. Currently, the American demand for domestically-consumed energy is being met, so if the source of that energy changes from, let’s say, water to wind, then a company like the Salt River Project (SRP), which produces hydraulic energy for the Southwest,will lose business and, consequently, jobs to a company like Tri Global, which produces wind energy.

Secondly, the unemployment rate (currently at 9.1%) means that at this very moment, at least 14 million Americans aren’t at work but would like to be. This figure does not take into account all of those who have already given up on finding a job. Setting Obama’s hope in new industries aside, his wish that 14 million Americans can re-claim factory jobs that were outsourced during the economic boom of the previous decade is also dead on arrival. Companies like Motorola and General Motors are not going to bring their manufacturing plants (which only employ 60,000 and 200,000 respectively) back to a country with a relatively high minimum wage and which now requires employers to fund expensive national health care plans.

I agree with Mr. Obama’s slogan that “we need to get America working again,” but our unemployment problems won’t be solved by solar power or the return en masse of Henry Ford’s assembly line. The key, I believe, lies with the small business sector, which, in 2007, had generated 64 percent of all new jobs in the previous 15 years. Small businesses, though, feel disenfranchised by new policies and regulations, and the dismal economy has atrophied their numbers. It is time, Mr. President, to change focus from big businesses we have bailed out for the last five years to small businesses that can really get us back to work.

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