Smart Management Lessons™
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Can Politicians take Credit for Job Creation?

In politics, one is either a job creator or a job killer. Or sometimes both–depending on who you’re listening to and what day of the week it is.

But who is really responsible for job creation? That’s an important question–and one that’s being asked with greater frequency in light of continuing dismal job reports and the sluggish pace of the economy, not to mention the ongoing Presidential contest.


It’s certainly valid to examine the economic records of candidates for higher office. Ironically, however, one of the most straightforward metrics for measuring an official’s economic performance–jobs created during his or her time in office–is often the most misleading.

For example, when President Obama took office, the economy was losing more than 700,000 jobs per month. Through May 2012, the economy has added 4.4 million private sector jobs over 28 consecutive months of job growth. While it’s impossible to say definitively how much credit the President deserves for turning the economy around, when you compare these numbers to economic forecasts or factor in Congressional action (or lack thereof), the picture becomes even murkier.

Governor Romney, on the other hand, ran for governor of Massachusetts vowing to attract new jobs to the state, but was hindered by the state’s balanced budget laws, which forced him to raise revenues by targeting corporate tax loopholes. To pro-business groups, Romney was raising taxes on businesses just when these firms were needed to help grow the state’s economy. So should Mr. Romney be credited–or, more to the point, blamed–for the dismal job creation record as the chief executive of Massachusetts?

When it comes to examining candidate’s economic qualifications, rather than playing the numbers game, we should start asking questions that matter more to smart business owners and managers. Do they support policies that are likely to promote or enable growth? When do they think government should take aggressive actions on the economy, and when do they think it should pull back? Are those the right judgments or the wrong ones?

But while there are clearly specific programs where government policies directly translate to job growth–e.g. those related to support for state and local governments (police, firefighters, teachers), defense contracts, and transportation projects (highways, bridges)–the truth is, for most American businesses, the impact of government economic programs is minimal.

Like most successful business owners and entrepreneurs, my approach to the jobs question is a practical one. Ultimately, it’s not up to the President or Congress to create jobs–it’s the responsibility of every business owner and senior executive to look in the mirror and ask themselves if they are taking the necessary actions to grow their business. Are they actively adding new products, improving productivity, and training their employees–concrete steps that create the conditions that drive the need for new workers? After all, new jobs come from increased economic activity, which in turn comes from more and bigger businesses.

The good news is that, despite the challenging and uncertain times business owners are facing, there are a number of specific actions you can take that will have a positive impact on your business, and your ability to create jobs. For example, using “Business Process Improvement” tools, you can work with your employees to improve productivity, lower costs, and eliminate redundant and unnecessary steps. These savings will immediately drop to your business’s bottom line.

You can also invest in employee training programs (such as lean manufacturing and six sigma) that will quickly pay for themselves, improve morale, and increase your ability to compete for new business.

Most customers want to do more business with their favorite suppliers. So how can you provide additional new products that will increase your sales with your best customers–and expand your business? Look to add new products, through internal development, licensing, buy-sell agreements, or joint ventures. You can broaden your product line with minimal risk and low investment.

So take all of the claims made by politicians with a grain of salt. When it comes to deciding who to vote for, ask the questions that you know matter, and leave the rest to the pundits and partisans. And when it comes to creating jobs, ask yourself which specific, proven tools can help you turn stagnation into elevation.

What policies would you implement to stimulate job growth?


Posted July 12, 2012

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