The two major gubernatorial candidates have both recognized, as have virtually all candidates across the country, that job creation must be the center of their campaigns. This is particularly crucial in California, the world’s eighth largest economy, where the reported unemployment rate of 12.3 percent is at its highest level since the 1930s. More frightening, the unreported rate, including discouraged and part-time workers, exceeds 23 percent; for Latinos and blacks, this rate is in excess of 30 percent in Los Angeles County.

Unfortunately, neither gubernatorial candidate has any special insight into how to create jobs in a global economy. But this criticism might also extend to President Obama and the vast majority of Congress.

Directly or indirectly, the Obama administration has expended over $1 trillion for job training for jobs that no longer exist in the United States, for jobs that are no longer sustainable if they ever were, and for extended unemployment benefits to millions of Americans who will no longer find a good paying job in either government or corporate America. Obama’s belated efforts to recognize the importance of seeking alternatives to job-training efforts have been derailed by partisan politics as evidenced by the Republican rejection of the $30 billion small-business fund.

There are solutions, however, that are at least as worthy of major pilot programs as any job creation program undertaken by the Obama administration. These programs do not require, as Meg Whitman’s detailed 17-point plan requires, major tax cuts for the wealthy and artificial tax benefits to corporate America.

Long ago, most Americans were entrepreneurial, as are the vast majority of the new immigrants who dominate the landscape of the county. What we must do is jump-start the creation of millions of new truly small businesses. Some of these businesses will eventually become the Googles and Facebooks of the world. Facebook was started in a college dormitory. Hundreds of thousands of new businesses could also be started throughout California, including the barrios and other inner-city communities.

Job creation

A plan to create and encourage the growth of small businesses will not produce 2 million new jobs in California as Whitman has promised, even if all 17 of her criteria are met. But for every investment of $25,000, including technical assistance and capacity building, we could, according to the small-business organization California Association for Micro Enterprise Opportunity, start a business or keep alive a business while creating or maintaining a job.

For an investment of $10 billion in California (mostly from federal funds), we could create 400,000 jobs by jump-starting new businesses or expanding existing small businesses. One in three of these businesses, even without tax credits, are also likely to hire one or more other employees. These new hires often come from the pool of those that Alan Greenspan, former chairman of the Federal Reserve, and Obama’s chief economic adviser, Larry Summers, refer to as the new class of “permanently unemployed” workers.

Today, 6.8 million Americans have been unemployed for a half-year or more and almost two-thirds of them for 12 months or more. In addition, 6.1 million Americans have given up in terms of seeking a job. A disproportionately high percentage come from the cohort of traditional workers (men 25 to 54), one-fifth of whom are now unemployed.

The “permanently unemployed” are disproportionately those without a four-year college degree and minorities, known as the new “majority minority” in California. But, as our nation’s history demonstrates, some of the most entrepreneurial geniuses never went to college or were part of the Mayflower elite.

Presently before the California Public Utilities Commission is a plan to redefine job creation and move the paradigm from corporate jobs to small business-created jobs. The plan, designed by the Black Economic Council, Mabuhay Alliance and the Latino Business Chamber of Greater Los Angeles, urges $27 million a year in funding to provide technical assistance and capacity building to small businesses that are the fastest growing sector of the California economy, minority-owned businesses. Hispanic-owned businesses, according to the U.S. Census, have grown over the last five years by more than three times the rate of white male-owned businesses (44 percent vs. 13 percent). Similar disparities exist for Black- and Asian American-owned businesses. A decision by the CPUC is likely by the end of this year.

Jerry Brown, when he was governor in 1975 and facing an unemployment rate of more than 9 percent, treated the issue seriously but admitted that state government could not directly create jobs through traditional means. Perhaps he was correct, especially if viewed through the narrow prism of job-training programs.

But, if both Brown and Whitman reexamine the futility of traditional job programs, including those heavily promoted by unions and government workers, they could become leading advocates for a Jeffersonian form of business democracy. This form of democracy would promote truly small businesses as the source of most new jobs, and create of an enlightened and effective democracy.

Theresa Ynzunza is president of Green Solutions Consultants Ltd. and Green Committee Co-Chairwoman of the Latino Business Chamber of Greater Los Angeles, Manny Cons is a founding member of the LBC-GLA and Jorge C. Corralejo is chairman-chief executive of LBC-GLA.