The Road Ahead for Middle Class Families | Reader's Digest

The Road Ahead for Middle Class Families

Middle-class families are squeezed as never before. Here, ten ideas to help us all get back on track.

By Barbara Kantrowitz from Reader's Digest | November 2011

IDEA 2
Remove roadblocks so companies will invest

Uncertainty about future government regulations can make companies hesitant to expand and add jobs. Meeting existing regulations can also slow growth. One solution, according to a recent report by the McKinsey Global Institute, is the creation of “Plug and Play” enterprise zones that would be preapproved for most zoning and environmental permits. McKinsey estimates that this could “cut in half the time needed to bring a new plant online.” Another job-promoting time-saver from the same report: streamline the U.S. Patent Office. In an editorial, the Washington Post says the patent system “struggles under an enormous backlog, takes far too long to approve legitimate patents, and paradoxically at times blesses weak ones that undermine serious innovation.”

WILL HELP:
Cash-rich companies looking to expand; inventors and entrepreneurs.

WON’T HELP:
Struggling companies that are already laying off workers.

CHALLENGES:
We don’t really know how much regulations affect job growth; concerns about impact on the environment.

IDEA 3
Find creative ways to fund new ideas
New business ideas are the lifeblood of the American economy; innovation is essential for job creation. In the Harvard Business Review, Edmund Phelps, a Nobel Prize–winning economist at Columbia University, and Leo Tilman, president of the strategic advisory firm L.M. Tilman & Co., argue that the enormous pressure to produce ever-growing profit is “choking off funds for innovation.” To fix this problem, they propose the creation of the First National Bank of Innovation, a government-sponsored network of banks that would raise money around the globe to invest in new businesses here — the structure would be similar to the Farm Credit System, a nationwide network that serves farmers, rural homeowners, and other agricultural businesses. Entrepreneurs would borrow at rates reflecting the riskiness of their ventures. “Business innovation ought to be declared a public policy objective — one at least as important as boosting homeownership and agriculture,” Phelps and Tilman write.

WILL HELP:
Creative entrepreneurs with strong new business ideas and their employees; smart investors.

WON’T HELP:
People in need of immediate relief. It takes time to build successful companies, and many new enterprises fail.

CHALLENGES:
Will Congress support a new government-sponsored banking system? And the rocky global economy has investors looking for less risk.

  • Your Comments