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Job Creation...Who, What, When, Where, How?
Creating new jobs ... vs. revamping old jobs requires a nursery of support. Here are ways job creation is being tackled.
Creating green jobs...or any reasonable job...is a challenge today. With layoffs taking our unemployment rate above 6% and still climbing, entrepreneurs and small companies are facing severe challenges in job creation.
China Job Creation
Even China is giving tax breaks and grants to labor-intensive businesses to help secure and create jobs.
Following is a look at job creation incentives being touted by various states and past priorities by the federal government.
The Michigan Job Creation Incentive
A substantial Michigan Business Tax cut for any high-growth-. sector business that chooses to create new jobs. To ensure a job for every worker, the governor has made a commitment to go anywhere and do anything to bring jobs to Michigan.
Since taking office, her five trips overseas have attracted 35 businesses and more than 7,000 new jobs.
To make the state’s business climate more business-friendly, she enacted the most sweeping reform of business taxes
in 30 years and has reduced permitting time for some permits from more than six months to less than 90 days. And
the No Worker Left Behind program she introduced last year is ensuring that displaced workers have the training they
need for jobs that are open today and that will be open tomorrow.
The governor will propose $150 million in building projects for necessary roads and buildings.
She proposes investing more than $800 million in bricks and mortar construction projects for Michigan’s higher education institutions, state parks, airports, military armories, and transportation facilities, and includes requirements for “green” construction.
She is proposing an increase in the Department of Environmental Quality general fund budget that would prevent
any proposed fee increases for businesses during this economically challenging year. The moratorium is
made possible through a one-time refinancing of some state bonds.
Invest Michigan! – An innovative new investment fund that will make capital available to businesses that
agree to grow new jobs in Michigan.
Michigan Job Creation Incentive – A substantial Michigan Business Tax cut for any high-growthsector
business that chooses to create new jobs in Michigan. New businesses in the top 50 growing sectors
will pay no taxes in the first year of the tax cut; existing top 50 growth-sector businesses will get a triple tax
credit on their Michigan Business Tax.
Expand Business Marketing and Tourism Promotion – Michigan will invest $50 million in promoting
Michigan to job-growing business leaders and economy-boosting tourists from across the country and around
Make MEGA Credits More Flexible – The governor will ask the legislature to make changes to the existing
Michigan Economic Growth Authority law that will make the state’s MEGA job creation credits more
flexible and competitive.
Film Incentives –The governor will work with the legislature to soon offer the most aggressive incentives for
film companies in the nation. The state will offer a 40 percent tax rebate to film companies that bring their
productions – and the associated jobs – to Michigan.
An Aggressive Renewable Portfolio Standard – The goal is 25 percent of all
Michigan’s electrical energy will be generated from renewable sources by the year 2025.
Centers of Excellence – Duplicating international successes, four alternative energy companies in Michigan
will partner with universities to co-locate to conduct research and create new jobs. The centers will link a
job-creating alternative energy company with a university. The company gets an incentive from the state, the
university gets a partner to bring its alternative energy research to market, and the state gets jobs.
Anchor Zones become Michigan’s partners in business attraction by giving these
companies tax credits based on their ability to attract or expand their own supplier base in Michigan.
Michigan will create incentives for wind developers to locate
wind farms in the state by reducing the property tax on wind towers by 50 percent.
Massachusetts Job Creation Incentive Program
Newly created biotechnology and medical device manufacturing companies are eligible to receive incentive payments for new job creation.
In order to qualify for the job incentive payment, qualifying companies must, in one calendar year, increase their level of Massachusetts employment by at least 10 full-time equivalent biotechnology jobs over the previous calendar year. The jobs incentive payment equals fifty-percent of the salary attributable to the increase of biotechnology jobs multiplied by the Massachusetts personal income tax rate.
Arkansas Tax Incentives
When a business locates in Arkansas, it can take advantage of the following additional benefits:
- Favorable unemployment insurance and workers' compensation rates;
- A right-to-work state, as guaranteed by the Arkansas Constitution; and
- Favorable individual and corporate income tax rates.
InvestArk is a sales and use tax credit program available to businesses established in Arkansas for two years or longer that invest $5 million or more in plant or equipment for new construction, expansion or modernization.
Advantage Arkansas participants investing at least $100,000 are eligible for the Tax Back program. Eligible businesses must derive at least 75% of their revenue from out-of-state sales
Colorado Job Creation Incentive Program
The Job Creation Performance Incentive Fund (PIF) provides a performance-based incentive payment to qualifying companies that have created net new jobs paying above average wages. The program is designed to support and encourage new business development, business expansions and relocations that have generated new jobs throughout the state.
Additional programs include:
- Bioscience discovery evaluation grants
- Business incentives
- Business loan funds
- Business technical assistance
- Business venture funds
- Certified Captial Companies Program
- Enterprise Zones
- Feasibility Studies
- Infrastructure assistance
- Manufacturing revenue bonds
California's Job Creation Programs
California has the largest consumer markets for
high technology, biotechnology, food and
agriculture, apparel, and entertainment,
and is a bell-weather for the nation’s
- limit state spending and refinance the state’s debt
- comprehensive workers’ compensation reform bill (SB 899), reducing employer costs by billions of dollars
- Public Utilities Commission (PUC) to
implement measures to accelerate power production
- bonds to
finance up to $350 million a year for research and development of stem cells.
- reformed employer litigation and Californians
overwhelmingly approved lawsuit limitations
- Million Solar Roofs plan which helps
residential and commercial utility users to install and operate solar panels on
- Strategic Growth Plan that makes major
improvements to the State’s infrastructure, thus reducing congestion and air
- Established “Building
America's Future,” which will rally support for a renewed federal
commitment to funding America’s infrastructure needs with state partners.
“Building America's Future” is a not-for-profit organization that will be
made up of elected and executive officials serving at the state and local
levels of government.
- AB 32, California's landmark bill that
establishes a first-in-the-world comprehensive program of regulatory and
market mechanisms to achieve real, quantifiable, cost-effective reductions of
- California supports
creativity and innovation with a superior educational system
and job training that produces an unrivaled,
highly skilled labor force.
- Over 2.3 million students are enrolled in 213
colleges and universities. Over 266,000
college graduates every year.
- California is a major center for design of automobiles,
furniture, apparel, software, electronics, telecommunications services, computers and semiconductors.
- Forbes.com announced that California leads all states
in categories of "200 Best Small Companies" and "Fastest-growing Tech
Companies", of which four of the top five are in California.
- California boasts nearly 621 members of
the National Academy of Sciences and
111 Nobel Laureates.
- High-tech exports totaled $52 billion in
2006, ranked first nationwide, and high-tech
goods represent nearly 41% of the state’s
- California leads the nation in several
strategic high-tech industry segments,
comprising between 20-60% of U.S. market
share in electronic components, commercial
aerospace, medical instruments,
biotechnology and transportation.
- California has been the #1 manufacturing
state since 1977.
- California also leads in
‘Green Tech’ and ‘Green Collar Jobs’.
California is home to many aspects of
renewable energies. Solar, wind, and bio
diesel and just a few of the technologies
that are being researched, developed, and
manufactured in the Golden State.
- California leads the nation in research and
development (R&D) and benefits from
receiving almost half of the nation’s venture
- Public biomedical companies that are
doing business in California invested an
estimated $27 billion in research and
development of new products for unmet
medical needs in 2006. The typical
California biomedical company
committed 44% of its cash to R&D
- California ranks first in nanotechnology
companies, holders of over 200 patents.
More research and VC funding for this
emerging industry is invested here than
anywhere else. The Silicon Valley has
established a Blue Ribbon Task Force on
Nanotechnology. The National Science
Foundation predicts industry revenue will
reach $1 trillion by 2015.
- California offers a 15% R&D tax credit
for in-house research and 24% for
contract research, the highest in the
- California is the number on state for
attracting foreign direct investment.
- Currently, only three minority markets at
the state level exceed $100 billion in
buying power annually, and two of them
are in California. Hispanic buying power
comprises $228 billion in California and
California’s Asian consumer market
totals $150 billion.
- California is globally connected with worldclass
- California has 18 foreign trade zones (FTZ)
which allow tenants to delay or forgo import
and export duties on goods and raw
materials until they enter U.S. commerce. If
the goods are warehoused in an FTZ, then
exported to other countries, no duties are
paid at all. In addition, California also has
42 Enterprise Zones (EZ) and 8 Local
Agency Military Base Recovery Areas
- Residents here have
the highest life expectancy in the country
and receive the best health care. Our
population has a median age of only 34.4
- California leads the nation in tourism
with $93.8 billion in revenues in 2006
and having the most towns on CNN
Money Magazine’s 2007 list of ‘Best
Places to Live’.
With all this infrastructure, why is it so hard to balance the budget, or create new jobs?
California Investment Assistance
- Targeted Tax Credits
- Employee Training
- Financial Assistance
- Local Incentive Options
Prior Federal Actions - Senate Finance Committee 2003
In 2003, The Federal Reserve did its best to revive the sluggish economy. In 2002, the Fed lowered the short-term interest rate eleven times, down to 1.25 percent. There was not much more rate to cut, so, the Senate turn to fiscal policy - tax cuts and spending increases.
They then focused on ways to strengthen the economy by increasing consumption. They then looked at long-term economic growth by examining incentives to increase investment.
When the economy is weak – stimulus is needed. And stimulus can only come about if consumers and businesses spend more money now. Consumption – not savings.
To avoid inflation and encourage economic growth, we need higher productivity and new capacity.
House and Senate Budget Committees on a set of principles for short-term stimulus. They agreed that any economic stimulus proposal must be: Timely. Take effect quickly. Be sizable. Be targeted at consumers and businesses who will spend it. Get the most bang for the buck. End in a year. And not increase longer-term budget deficits.
Almost all states have balanced budget requirements. So when faced with deficits, they must lay off workers, cut spending on programs, or raise taxes. These actions only make the economy weaker.
Second, we need to extend unemployment benefits to the people left out when the labor market is tough. A Department of Labor study found that every dollar in unemployment benefits results in $2.15 in GDP. For every dollar spent on unemployment benefits – we more than double the impact on the economy.
Third, we should give a tax cut to those who will spend it.
...and we see where those strategies of five years of free market consumption and investment landed us in 2008!
Edited by Carolyn Allen