CHICAGO (Jan. 26, 2015) — Now that the 114th Congress has assumed power, it should get to work on the nation's top priority: strengthening the economic recovery.
To that end, Congress should focus on bolstering our nation's small businesses.
As a small-business owner myself, I believe strongly that improving the health of small businesses is the key to improving the economy, growing the middle class and creating innovative products and services.
Here are two ideas for boosting small businesses and job growth:
Facilitate on-the-job training for the unemployed — While progress has occurred, small businesses are not hiring more because they remain uncertain about the strength of the U.S. economic recovery.
Often, they are trying to do more with the same number of people. One incentive that could encourage them to hire more workers — especially the long-term unemployed — is to temporarily shift the burden of worker benefits to the federal and/or state governments until employees have completed on-the-job training.
For instance, a program voluntary to both employees and employers could be structured so that if an unemployed person opts to join an on-the-job training program, the employer would pay the person's wages and the state and federal government would use some of the money they would otherwise have paid in unemployment to defray some worker benefits (including healthcare, workers' compensation, unemployment insurance, etc.) that the employer would pay. Afterward, the employer would shoulder the full burden. The employee would not see any decline in his or her benefits.
This type of program would benefit the employee because he or she gets training and the opportunity for a permanent position. It benefits the employer by reducing the costs of such training.
Expand small-business innovation funding — One of the best programs that the federal government sponsors is the Small Business Innovation Research (SBIR) program, in which more than 2.5 percent of federal research and development funding at the largest agencies goes directly to small businesses.
Created by President Ronald Reagan in 1982, this program has provided more than 110,000 businesses with more than $29 billion in funding.
Cutting-edge technologies have emerged from this program to enhance national defense, healthcare and energy needs. Our own company, Sivananthan Laboratories and its subsidiaries, have been funded through SBIRs to successfully develop next-generation infrared night-vision technology to equip our soldiers. The SBIR program should be expanded to encompass a higher percentage of R&D spending. This wouldn't require more R&D funding but simply direct a slightly greater share to our nation's small businesses that create most of the new jobs in our economy.
There are many good ideas for helping small businesses, and the ideas above are a sampling. Whichever ones are pursued, more needs to be done now to power small businesses — the engine of our economy and a major source of job creation and innovation in our economy.
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Raja Krishnamoorthi is president of Sivananthan Laboratories Inc. in Bolingbrook, Ill., and former deputy treasurer of Illinois. He wrote this piece for Crain's Chicago Business, a sister publication of Tire Business. Have an opinion on it? Send your comments or a letter to the editor to [email protected].
