SBE Council issued the following statement on June’s employment data, which showed an anemic 18,000 jobs gain. The U.S. Department of Labor also reported a downward revision (-44,000) in the job numbers for April and May.
“The jobs numbers are not surprising given low business confidence, increased government costs, increased health coverage and energy costs and the fact that small business owners are not generating enough new or sustained revenues to justify adding employees. A sputtering economy, the lack of pro-growth policies from Washington, along with economy-wide regulations and the threat of new taxes do not create the type of environment conducive to job creation. The White House needs to wake up,” said SBE Council President & CEO Karen Kerrigan.
According to a May 31 “Entrepreneurs and the Economy Survey” released by SBE Council, 76 percent of small business owners were dissatisfied with federal economic policies, and many expressed a grim outlook for their firms. Small business owners said they were being hammered by higher gas prices -- 26 percent have had to cut employees or their hours worked; 47 percent reported that higher gas prices were affecting their plans to hire new employees; and 41 percent raised their prices because of high gas prices. All-in-all, ineffective and costly government policies combined with rising business costs and anemic sales growth are taking their toll on small business confidence and their bottom lines.
SBE Council Chief Economist Raymond Keating observed: “Why are so many people surprised by the abysmal jobs data released this morning? Perhaps it’s because they fail to understand the fundamentals of how the economy works and creates jobs.”
According to Keating, no matter how you slice it, the jobs data were simply terrible. According to the payroll survey, for example, job growth effectively was nonexistent. More importantly, the household survey, which better captures start up and small business activity, showed a loss of 445,000 jobs. While household data tends to be more volatile month to month, since its recent high in March of this year, employment is down by 530,000.
“More government spending, increased regulation and higher taxes are not economic tonics. But that is what small business owners are getting from Washington,” said Keating.
Keating added: “The only way this economy is going to get back on a path of consistent, robust GDP and job growth is if the policy agenda shifts in the direction of substantive and permanent tax and regulatory relief, sound monetary policy, expanded trade, and smaller government.”
SBE Council Staff