Trump
Should Fix the Business Climate So a Million Americans a Year Can Start Companies
By Carl Schramm
Consider
the economic situation that President-elect Trump is inheriting. Despite the
addition of 161,000 jobs in October, the labor-force participation rate fell to
its second lowest level in nearly 40 years, according to the St. Louis Federal
Reserve. More people have joined the ranks of the chronically unemployed,
slipping into poverty at alarming rates as their skills decay and dependency on
public assistance grows. Considering population growth, America needs at least
325,000 new jobs every month to stanch the growing numbers of discouraged
workers, according to the Bureau of Labor Statistics. Merely bringing back factories from overseas
will not solve this problem. Technology has made every factory more productive.
Fewer workers make more goods no matter where they’re located. At the same
time, fewer U.S. businesses are being started. New firms are the country’s
principal generator of new jobs. What can President Trump do to encourage more
entrepreneurship? First, increase economic growth. More businesses start when
GDP expands at 4% rather than 2%. Existing businesses look for new markets,
often turning to young companies for innovative ideas. [more...]
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