Education vs Job Creation

First and foremost, I truly believe an educated workforce is a top priority in our state and in our nation. But let's look at the mechanics of it a little more closely.

I am considering going back to school and pursue a law degree. Do we need more lawyers? Probably not. But in my field, the knowledge of law is a very important tool in the toolbelt. I repeat, knowledge is a very useful tool.

However, if this consideration becomes reality, I will use this knowledge to be a better entrepreneur. I truly think America's greatest gift to us is the ability to own our own business or be self-employed. In my opinion, that is the American Dream.

My concern then, on the political front, is the roadblocks that seem to be popping up and the direction our nation is moving.

This blog entry from Stacey Campfield sums it up pretty well.

Education and jobs or independence and growth?

George Korda does an interesting article on the need for education in being the lynch pin to get good paying jobs. While he makes many great points (As usual) I tend to see the need in areas bigger then education.

What? Impossible you say? Education is the end all be all for a good future and life. Right?

Well, lets do some math. In the article it talks about how 40,000 people had already applied for a job at the new VW plant. 100,000 were expected to try and fill the 2,000 positions. Probably the known stipulation that a two year diploma was required to get a job kept some away.

Fine. Lets just say at least half of them knew and fit the requirement going in. No, Lets make it even harder then that. Lets say only one in ten had the requirement. Even though Tennessee has a much higher college graduation rate then that (it is in the mid 20's) we still have at least 4,000 well educated and qualified people to fill 2,000 job openings and that is an absolute minimum. I would expect it is more like half to two thirds knew and have the education and qualifications to fit the bill. That is more like ten people trying to fill every position. If we double the number of college graduates or even tripled it, would that suddenly in and of itself produce more jobs? No. You would just have 8,000 or 12,000 qualified and educated people trying to fill those same 2,000 jobs. Lack of a good education is obviously not the only thing holding people back from a good future.

The problem is clearly more a lack of jobs no matter what the qualifications are. Not the lack for educated people to fill those positions. What are we competing against? places like India, China and Japan who have an innovative, educated workforce willing to work at the same type job for pennies on the dollar compared to US employees.

This leaves us a few alternatives. Raise barriers to foreign imports? If we do that a few things will happen. The world will do the same thing to some of our goods. We would loose the high end products we have been selling overseas but would gain back the low end textile product manufacturing we lost. A mixed bag.

Increase taxes on foreign owned companies or products sold in the U.S.? We would loose some of the foreign owned employers who employ large numbers of people such as VW, Toyota and others, but it would probably allow the US owned companies to bounce back a little. Expect the same thing to happen back to our world wide brands as well. a mixed bag.

Lower our standard of living, minimum wage and regulation to compete with the foreign factories over seas? (not something most politicos want to put on a mail piece for their next election) A mixed bag.

Lastly. The one many people seem to never talk about is creating or growing our own market and brands. America is full of independent, intelligent, hard working people. The problem is we have gotten into a mind set of thinking we need someone else to give us a job. That having a job in a big factory is the American dream. That is the ultimate goal now.

When did that happen? It used to be owning the factory, being the employer or the boss was the American dream!

I think all this talk about "Evil profits", class warfare and the "terrible big boss" have made us think that achievement is somehow bad. That, heaven forbid we ever start a company and succeed we might make money and have employees! What would the world think of us then? "Better not climb too high or dream too big. Might have people attack you and call you names. You'll get taxed and regulated more. Better just get an education and hope to get on at some factory job."

That kind of negative talk has to stop or we are in big trouble as a nation. What has to happen more then anything, is just like what happened when baseball became a battle of the "haves" and the "have nots". We need to look to starting up or reinvigorating our farm team system. We need to incentivize business ownership and entrepreneurship. Reward it. Let it profit, champion those who work, innovate, succeed and grow. Remove barriers and the stigma of starting businesses.

Education is great and yes, it is an important part. But if we do not start developing our own next generation of inventors or business people like Henry Ford (who they say couldn't print his own name) then no matter how educated we are, we will be in trouble. Our governors and presidents will forever be recruiting factories overseas. We will forever be begging for scraps off another mans table instead of dining at our own banquet of success.

I wish our guber candidates, instead of always talking about how with a new super educated student what a great foreign job recruiter they will suddenly be, would once in a while talk about how they will start motivating, incentivizing our own people and companies to start, expand and stay here.

Unemployed?

The other day, I was listening to the laments of my 80+ Grandma Nell about her morning paper delivery being canceled (The Tennessean, bad move on their part btw on totally canceling Franklin County delivery). For someone who has gotten the morning paper for 50+ years, this was a huge big deal in her quality of life. If Grandpa Mose were still alive, there would have been hell to pay.

Being the ever-thinking entrepreneur, I immediately thought that situation was a prime opportunity for someone to come in an offer paper delivery for a fee. You have a captive, established market who was already paying for the service, you have the product ready to deliver, the only thing you needed to do was set-up the mechanisms to make it happen. Kinda brainless actually. If I didn't already have 5 jobs, I would do it.

There is always a way to make a living in any economy. You just have to get out there and find opportunities and make it happen. Surely, we haven't lost that much of our good ole American ingenuity.

Here is a great article for those thinking about jumping into the self-employed genre (willingly or unwillingly).

I accepted a severance package from my employer because I've always wanted to be self-employed. My problem is I'm not sure if the work I did for the past 30 years translates to private enterprise. With the economy the way it is, is this a bad time to start a business? In what industry will I find the greatest profits?

It depends on what your interests and skills are. What do you enjoy doing? Would anyone pay you to do that? What does the marketplace need right now, and how does that relate to what you're passionate about?

Keep these five tips in mind:

1. Remember, baby boomers are the largest generation on the planet, and they have money. They are at the prime of their lives and do not anticipate sitting in a rocking chair. Although the present economic decline may affect their portfolios, this means only that they may postpone retirement. However, they remain more affluent than past generations at their age. They need financial planning, health care and help traveling. Consider providing it.

2. Because many boomers will continue to work as long as possible, they also need help caring for their aging parents. At the same time, more elderly citizens want to remain at home. Senior services companies offer clients help such as making medical appointments, providing transportation, shopping for groceries, and taking care of banking and other financial needs.

3. Going green is hip, smart and part of a $209 billion-a-year industry. Marketing and installing solar panels is one way to tap into that trend and earn a living on your own.

4. If gadgets or electronics are your strong suits, consider a second life as a technology consultant. All businesses have computers and need someone to help keep them humming. So, why not earn money from those technical talents?

5. Finally, a sector that has gotten a boost from the federal stimulus bill is construction. Tennessee is scheduled to get millions of dollars, much of which will go to private industry to create construction jobs. An additional $150 billion is in the bill to repair or replace states' crumbling infrastructure, which includes bridges, highways, roads, public transportation and water projects. Private enterprise will play a role. Maybe you could, too.

American Dream

As I sit here juggling 7 different projects in 5 different fields of expertise, I start to scratch my head and laugh. Living in paradise has its complications.

I live pretty simply, but there are things in my life that need to be funded. When I moved to the mountains, I traded a "normal" life for one that required a great deal of creativity to survive financially. There are not that many jobs locally that need a great PR gal (or can afford one), so I started finding other opportunities that could capitalize on my unique skillsets. My current resume reads like a person with ADD. It is all over the board.

The common denominator is an entrepreneurial spirit. I totally understand the hardships associated with being out on your own. Insurance, taxes, liability, employees, liability, taxes, insurance, economy, overhead, taxes, liability, insurance. Each start-up business has its demons, but the benefits to making your own way by your own expertise is truly a thrilling and fulfilling endeavor...in fact, second only to being a parent. Owning your own business is truly the great American Dream.

So as we try to figure this economy thing out, I am thinking some of the greatest businesses were started during the worst of times. We are Americans and that is what we do best. That stimulus money should be stimulating us.

Entrepreneurs are best stimulus for the economy
Posted by Carl J. Schramm/ NJ Voices Guest Blogger March 04, 2009

The day after the House of Representatives voted on the stimulus package, I met with a Democratic member of Congress.

He told me, "I know the package won't begin to create enough jobs and certainly not now when we need them." Worse, he worried, "The voters will be on to this by the 4th of July and they won't support more spending then because they don't support it now.

"How," he asked, "do we get out?"

Those in charge in Washington think they know the answer: take a pledge from the Keynesian playbook. Spend (and borrow) massively and hope that government will spur demand and revive the economy.


The congressman knows better. This bill had everything to do with necessary political theater, and nothing to do with basic economics. Anecdotal experience and observation have taught him what drives growth: individual activity in thriving communities.

But what drives that activity is the "animal spirits" of entrepreneurs. And no one understood that better than another long-dead economist - one whose work is vastly more sound than John Maynard Keynes' and directly applicable to current times.

Joseph Schumpeter is best known for the concept of "creative destruction," which asserts that economies flourish only to the extent that entrepreneurs disturb the status quo. Entrepreneurs are job creators. More entrepreneurs mean more growth and more prosperity for all. Or, to put the equation in terms fit for our times, E=R: entrepreneurship equals recovery.

Only private enterprise -- in particular high-growth start-ups -- will create the jobs and the wealth to right America's listing economy. That is, if we let them.

What our economy most needs is another outbreak of entrepreneurial energy. It is waiting to happen all around us. As people face layoffs, many take with them wonderful ideas for entirely new products and services. Layoffs are tough, but they need not spell doom. The average age of those who found high-tech companies in this country is 39. In fact, twice as many founders are older than 50 as are younger than 25. The end of one career can be the beginning of another.

Some people getting pink slips might have ideas that could become entire new industries. Indeed, some of America's largest and most successful firms were started in recessions or bear markets or both -- including General Electric (founded in the wake of the Panic of 1873), IBM (started in the last year of the recession that followed the Panic of 1893), United Technologies (same year as the 1929 crash), Microsoft (1975 depth of "stagflation") and Guess (1981, worst post-World War II recession to date).

If Schumpeter were available to take a 3 a.m. call from a nervous president unsure if his stimulus policy will stimulate, he would say that the most important thing government can do is step out of the way and let the talented next generation of entrepreneurs do their work unhindered. But he might also recommend certain modest steps -- most of them not incorporated into the stimulus bill -- to help entrepreneurs work their magic.

First, encourage risk-taking through tax policy: exempt entrepreneurs from payroll taxes. In fact, a year-long moratorium on payroll taxes could have the economy back up inside of a year.

Second, exempt entrepreneurial businesses from capital gains taxes. The president promised as much during the campaign. Somehow, the Congressional scribes forget to get it into the stimulus package. Sen. Chuck Grassley (R-Iowa) tried to reinsert it as an amendment, but was blocked by members of the president's own party. Perhaps the president could prevail on the Congressional leadership to reintroduce this provision as a separate bill.

Third, focus on the needs of new businesses for affordable health coverage by telling insurance companies they can compete across state lines with a bare bones "entrepreneurs' policy."

Fourth, encourage the world's brightest students to come here, study, and become entrepreneurs. Over 40 percent of the growth of the Silicon Valley in the 1990s came at the hands of foreign-born entrepreneurs.

Finally, put some government spending into research and development for defense. We need more sophisticated protections against biologics and tactical terrorist weaponry, including cyber-assaults. Spending in these areas would bring forth thousands of new companies whose innovations and new jobs would be of great benefit to our economy, while helping America focus on the one place in modern society where seeking order is well-advised, namely, world affairs.

This is the way out. Over half of Americans aspire to start a business. In other words, the people who will save our economy are not mysterious: they are you and me. President Obama promised, "Yes we can!" American entrepreneurs are ready. They just need a little help. Schumpeter, not Keynes, shows the way.
Carl J. Schramm is president and CEO of the Kauffman Foundation and coauthor of Good Capitalism, Bad Capitalism.