California’s unemployment rate is 8.3 percent, 1.6 percent higher than the national rate and higher than almost every other state. In the Central Valley in particular high jobless rates persist.
Why– especially considering the recession ended almost five years ago?
Part of the reason is our region’s drought, but weather is just part of the story.
The largest contributor is policy uncertainty. Small businesses, as one would imagine, operate at small margins. As a result, they need ample time to plan – uncertainty is their enemy.
Unfortunately, gridlock in Washington, D.C. has made planning nearly impossible for America’s businesses. The bickering over the last few years has left entrepreneurs wondering: how will lawmakers handle spending, taxation, free trade and immigration? Or will they do anything at all?
These questions make it impossible to decide whether and where to make capital investments, to increase workforces or cut back, or even whether to keep our doors open at all. My transformer business does well when the Central Valley’s economy does well and Washington’s inaction is stagnating our economic growth.
There are two encouraging signs, though, that may indicate things are about to change. First, instead of reaching the brink of default – a point it’s reached too many times in the recent past – Congress passed a debt ceiling plan well before it reached its lawful borrowing limit.
The second positive sign is the tax reform plan recently released on Capitol Hill. Now, there’s a lot in there that lawmakers will disagree with, but at least a roadmap to reform now exists. And politicians ranging from President Barack Obama to Tea Party activists agree our tax code is broken and needs to be fixed so it is more fair and less confusing for American families and small businesses.
Passing tax reform is critical, but it’s just the first step toward adding certainty back to our economy.
Congress must also pass immigration reform. Providing a national solution to this problem will make it easier for our small businesses to find the workers they need and stay on the right side of the law.
Next, lawmakers must help pass free trade agreements that allow products made and grown in the Central Valley to be sold worldwide. The bulk of California’s trade comes from the 20 countries with which the U.S. has trade agreements. Congress must support efforts to negotiate more of these agreements.
Lastly, our elected officials must honor the bipartisan realization behind the debt ceiling bill enacted earlier this year: the U.S. cannot lurch from financial crisis to financial crisis, risking the country’s credit rating in the process. The U.S. must pay down its debt, but our lawmakers must find responsible solutions without threatening to shut down the government again.
Our Representatives in Congress can’t solve the weather, but if they work together and compromise, they can provide more economic certainty for Central Valley small business owners.
Sean Broderick is Owner and General Manager of Western Utilities Transformer Service