$33 Billion Can Hire a Lot of Employees

Online, January 3, 2011 (Newswire.com) - The Obama "jobs plan" as it is being called in some political circles is an incentive plan primarily aimed at small businesses to help them hire more workers and sometime to increase the pay of existing workers. The incentive plan also includes an extra $5,000 tax credit per hire as well as reimbursement for the extra Social Security taxes added to the small business payroll as a direct result of hiring new employees. By some analyst's estimates, more than one million small businesses are expected to add new positions to take advantage of the new program. Some analysts have predicted an increase in unsecured business line of credit applications as a collateral result of the new tax credits.

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The program may be showing some results, but its still far too early to know for sure what the total economic impact of the legislation will be. For the first week of June, the Labor Department reported that the number of U.S. workers filing new claims for unemployment benefits dropped slightly, while continuing claims fell to the lowest level in 18 months. Although this represents a very small decrease in the overall rate of unemployment, it was in line with many economic analysts estimates for what should be happening with a slow recovery. The Labor Department report indicated that while a total of 431,000 jobs were created during the month of May, many of those were due to temporary hiring for the 2010 Census and only 41,000, or 9.5 percent came from the private sector. The boost in hiring reduced the overall unemployment rate to 9.7%. Not all areas of the country experienced a drop in claims - Florida remains among the states with an increase in unemployment claims - mainly due to layoffs in the construction, trade, service, manufacturing and agricultural sectors.

Job creation has a long way to go if it is to erase the average unemployment rate of 9.7% nationwide. It has been forecast that over one-million small businesses will add new positions in coming few months - as they take advantage of a newly established $5,000 tax credit. Most economists agree that the struggling economy will continue to exhibit high rates of unemployment through at least mid-2011.

President Obama has asserted repeatedly that the economy continues to improve and contended that his economic stimulus legislation is having a positive effect. He heaped praise on businesses, particularly small business owners who are "... the true engine of job growth in this country." Obama remained optimistic that, despite the damage done to the labor market during the recession, the economy is now poised to start adding the jobs people need. The millions on the unemployment rolls hope that he is right. Unsecured business line of credits or a small business loan may help small business owners finance new hires in anticipation of a strong economic recovery.