WE ALSO NEED TO ENGAGE THE OTHER 80%
Over the past few weeks we have seen several articles in our local newspapers and magazines that have referred to the “Brain Drain”. As the father of three children that graduated from Long Island High Schools and have now established themselves as very productive citizens of other states, I am well aware of the effects of this long term problem. My children, as well as the children of many of my friends are gone, and are never coming back to live here. At its core, the reason for the drain has been that Long Island simply doesn’t have enough of the jobs necessary for them to earn enough money to live here, nor to attract others to live here.
If Long Island is to become a place of opportunity, as it was for most of the past half of a century, the question becomes one of coming up with a way to reverse the trend. Many good ideas have been put forth or enacted. For instance, in June, Governor Cuomo signed the Start Up New York Bill.
http://www.tax.ny.gov/pdf/memos/multitax/m13_7c_6i_11m_1mctmt_7s.pdf
This legislation allows approved companies to operate tax-free for 10 years. It encourages companies to take advantage of the creativity of New York’s world renowned educational institutions, in an attempt to create jobs. Another good idea recently put forward is to invest in sewage infrastructure that will permit the construction of more multi-family, and hopefully more affordable, homes.
While these are both good ideas, they are very much in line with the approach that New York has taken for many years. They are quite justifiably aimed at attracting funding sources or companies that have lots of money. These are most likely going to be large government entities or big businesses. Logically it makes sense to encourage these sorts of entities, because they certainly have the funding to help jump start our economy. These proposals, however, ignore a major engine in restarting our economy, and that is the small businesses.
It is highly unlikely that a small business is going to have the resources to invest in the sort of technology that is available on our campuses, or be able to put millions of dollars into upgrading infrastructure. While each small business accounts for only a tiny fraction of the State’s overall production of goods and services, collectively they are very important. Statistics tell us that approximately 80% of the companies on Long Island and in New York are small businesses. In addition to developing programs that will involve large companies or government entities, we should also be developing programs that are going to turn our smaller companies into hundreds of little hiring engines. They will not be like the companies recently cited in Newsday that received State Aid and each created over 100 jobs. You may, however, find 20 companies that can each add 5 jobs.
The question is to come up with a program to do this. I think that the answer lies in yet another Newsday article that described the number of entrepreneurs that have entered the contest to win 250,000 dollars as part of the JPMorganChase Mission Main Street Grant. Over 2,400 companies in New York alone have applied. When asked what they would do with the money; replies varied from doing more advertising, to filling orders and most importantly to hiring new staff. The fact that Chase received so large of a response from so many small companies suggests to me another approach to increasing jobs. The State of NY should offer a similar program, but with a different approach. They should offer matching grants. For example the company would put up $50,000, and the state would match it with $50,000. For a small company this amount of money could be used as the catalyst to create several jobs. It might encourage the small restaurant owner to add a second location. It might encourage the small retail store to increase its square footage. Again, the number of jobs created by each company would be small, but the overall effect would be large.
This approach would also provide a much more stable economy. A company that receives a State incentive to entice it to come to NY to expand, is just as likely after a few years, to accept an offer from another state and leave us. Home grown small companies are much less likely to do this. Usually these companies are here for reasons that are more personal than economic. In addition, one large company either leaving or going out of business may take hundreds of jobs with it at one time. Having 200 jobs spread out over 20 companies, makes this major loss of jobs much less likely.
I applaud the efforts to jump start our local and state economy, but added to this should be a component that also engages the 80% of companies, that are the small businesses of Long Island and of New York.
Dr. Larry Green
President Westbury Diagnostics a LI small business
