I landed on this topic after perusing the Create Jobs for USA brochure at my local Starbucks. The material was certainly interesting and quite compelling to me. I was invited to purchase a wristband for $5 which would then be matched six-fold and the money placed in deposit with the Opportunity Finance Network. They in turn use the funds to provide loans to community businesses all across the U.S.
Perhaps there are still some concerns with access to capital. I think it's fair to say that in the early stages of the banking meltdown, the credit markets were frozen and money was not circulating. However, today we see low interest rates and special Small Business Administration incentives to banks that provide greater access for small businesses.
I believe many small business owners are also struggling with uncertainty. According to the SBA, 99 percent of U.S. businesses are considered small businesses. And these businesses are the key to job creation and growth. Yet given the tremendous economic uncertainty and our ongoing dance at the edge of the so-called fiscal cliff, it's no wonder that small business owners are leery of committing to new hiring.
Either way, there's clearly cause for alarm since the unemployment rate has been running above 8 percent since February 2009. While there was a drop in the rate last month to 7.8 percent, this has been the longest consecutive-month stretch of unemployment in excess of 8 percent in more than 70 years according to data from the Bureau of Labor Statistics.
The wristband theory works this way; $3,000 donated by fellow Americans (which happens to be 600 wristbands) matched with another $18,000 is the exact sum that the Opportunity Finance network estimates will help a small business create or sustain one job, should the small business receive a $21,000 loan.
And the repayment rate from these small businesses has run at a whopping 98 percent!
The SBA classifies small businesses as those with fewer than 500 employees. There are a lot of these. When small businesses fail, there isn't much fanfare or panic. We simply expect that another business will rise up and potentially fill the vacated opportunity. Jobs are lost, jobs are gained. Have you ever heard, "That business is too small to fail?"
It's not likely that these small business leaders have time to start an occupy movement any time soon, where they take their grievances to the streets. They have their hands full trying to maintain and grow their enterprise. And some may be in a position where they have room to add new hires, but now they simply wait in hopes to better understand and project what potential regulatory changes might impact their future.
Michael Lee, owner of Express Services in Seattle is keenly aware of how this uncertainty plays out. His employment firm is a temporary and recruiting business that provides labor to many area small businesses. "It actually helps our industry in a sense," said Lee. "These companies are backfilling work with temps rather than hiring when they feel like they're in the dark concerning taxes, medical insurance requirements, major cuts in government spending and the like."
The recent presidential debate, which focused on domestic policies, included plenty of talk about unemployment. Clearly, unemployment is a tremendous concern and challenge to our economic vitality.
In Washington state, our top two gubernatorial candidates are also promising solutions that will bring more jobs to the region and stimulate greater levels of employment.
It's disappointing to me that the debate, regardless the party, at the national, state or regional level, politicians are not giving us much in terms of concrete or specific actions that would provide relief or hope to the small business owner.
So here's what I did. Rather than sit on the sideline and complain, I invested in hope. I bought the wristband as a token that this may provide stimulus to help even one new job to be created or saved. After all, it's only $5. And the wristband is made in the U.S.A. This is not a bailout. Rather it is a gift that is converted into an enterprise loan to gain jobs.
For more information about the Opportunity Finance Network, go to createjobsforUSA.org.
Juergen Kneifel is a senior associate faculty member in the Everett Community College business program. Please send your comments to email@example.com.