SBE Council Chief Economist: Latest Jobs Data Stoke Deep Worries About Entrepreneurship and Economy

Today, Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council (SBE Council), released the following statement in response to the July employment data reported by the U.S. Bureau of Labor Statistics:

"The latest jobs report is bad news when you look at the data that matter most when it comes to the state of our economy and job creation.

"The establishment survey payroll numbers pointed to employment growth of 163,000. While at least positive, those numbers are far below where they should be during an economic recovery, such as in the neighborhood of 250,000.

"But the real story lies with the household survey, which better captures start up and small business activity, and is the survey from which we get the unemployment rate. The news here was all unequivocally bad.

"The labor force actually fell by 150,000, with the labor force participation rate declining and remaining at nearly three-decade lows. The discouragement of workers persists.

"Employment actually declined by 195,000, with the employment-population ratio also at near-30-year lows and the unemployment rate ticking up to 8.3 percent. Businesses simply are not creating jobs, being discouraged by uncertain and costly public policies relating to taxes, regulations, and government spending, for example.

"There's really nothing positive to latch onto here. Instead, the numbers only stoke more worries about the state of entrepreneurship and our economy."

SBE Council Chief Economist: U.S. Should Have At Least Wiped Out Job Losses from Great Recession

Today, Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council (SBE Council), noted that by this point in our economic recovery, the U.S. should have at least wiped out the nearly 9 million job losses during the Great Recession, rather than still being down by 4.7 million jobs.

Keating explained:

"According to the government's household survey, from November 2007 to December 2009, U.S. employment fell by a staggering 8.9 million. Over the subsequent 28 months, job losses have only been cut to 4.7 million.

"From the recent bottom on jobs in December 2009 to April 2012, the U.S. added 4.2 million jobs, or an increase of 3 percent. That might sound pretty good, but when you compare it to where we could and should be, it's pathetic.

"Consider the previous big economic downturn in the early 1980s, and what happened subsequently. After employment hit bottom in December 1982 to April 1985, the U.S. added 7.9 million jobs, or an increase of 8 percent. That is, over the same number of months, the U.S. added 7.9 million jobs in the early eighties, while we have added only 4.2 million recently. At the very least, we should be a million jobs short of wiping out the job losses from the Great Recession, rather than being 4.7 million short.

"But considering that our economy and the number of employed are larger today, if we had produced jobs at the same rate over the past 28 months as we did during those 28 months in the eighties, we would have added 11 million jobs, that is, nearly 7 million more jobs than we have created. Those 8.9 million job losses would have been wiped out, and we would be in positive territory by more than 2 million jobs.

"The fundamental difference is about economic policy. In the 1980s, taxes were cut, deregulation was undertaken, and monetary policy was being refocused on price stability. That promoted risk taking, namely, entrepreneurship and investment, and boosted economic growth and job creation. Over the past several years, though, the focus has been on higher taxes, the threat of increased taxes, more regulation, and loose monetary policy. That has restrained risk taking, and therefore, greatly restrained economic and employment growth."

The Path to Job Creation -- Not an easy one...

On February 1, the House Small Business Committee hosted a hearing on "The Path to Job Creation: The State of American Small Business." SBE Council member Mike Fredrich provided great testimony on the threats and uncertainties that continue to linger for small businesses. Committee staff put together this great highlight video of the hearing, which features Fredrich.



As summarized by House Small Business Committee Chairman Sam Graves (R-MO) regarding testimony provided by witnesses: "There is no doubt that the lack of certainty in burdensome regulatory requirements and complex tax structures coming from Washington continues to be an impediment for growth and job creation for small business owners. This must change sooner rather than later if we want to see economic growth and Americans back on the job.”

Karen Kerrigan, President & CEO

Keating on What's Needed to Spur Job Creation

SBE Council chief economist Raymond J. Keating was part of a National Review online symposium focused on what's needed on the policy front to get job creation moving.

Read what Keating and other experts had to say here.

Supporting America's Job Creators -- Spotlight: Congresswoman Buerkle (R-NY)

On February 10, 2011 SBE Council President & CEO Karen Kerrigan testified before the U.S. House Committee on Oversight and Government Reform on the topic of "Impediments to Job Creation." Chairman Darrell Issa (R-CA) hosted a very effective hearing, where SBE Council member Mike Fredrich, President of MCM, LLC, also testified about how government regulation is impeding his manufacturing firm's ability to compete in the global marketplace.

The entrepreneurs and business leaders who testified drove home a common message: Government regulation is out-of-control. The torrent of new regulatory intitiatives and activity is not only adding to business costs, it is compounding uncertainty. Under such conditions, business owners will not hire at the robust pace needed to restore the economy back to strong levels of growth.

One Committee member, Congresswoman Ann Marie Buerkle (R-NY), asked several rounds of excellent questions. She was recently featured in a Forbes.com video (posted below) where she talked about what entrepreneurs need to create jobs and spur the economy forward. Congresswoman Buerkle is also the Subcommittee Chair on Government Spending where she will investigate specific government programs, including a review of the massive stimulus bill and its impact on jobs (did it create any or not?)



Chairman Issa continues to listen to America's small business owners and entrepreneurs. As you may recall, he is collecting feedback and stories from small business owners regarding your experiences with government regulation. Please share your challenges and ideas by clicking here.

SBE Council Staff Post

Jobless Benefits or New Jobs

Well, which is better – more jobless benefits or businesses actually creating new jobs?

This question comes to mind given what’s going on in our nation’s capital. On April 14, the Associated Press, for example, reported: “A measure to restore eligibility for the jobless to receive up to 99 weeks of unemployment checks appears on track despite objections from Republicans concerned about its $18 billion cost. Democrats are also seeking to extend those benefits through Memorial Day instead of risking another cutoff in just three weeks.”

Meanwhile, congressional leaders have been pushing and will continue to push an anti-growth, anti-jobs agenda. That agenda features ObamaCare, which will raise taxes and health care costs; an energy agenda focused on hiking the costs of fossil-fuel supplied energy; a tax agenda focused on increasing taxes for entrepreneurs, small businesses and investors; and a spending agenda that threatens still more tax increases, including the possibility of imposing a VAT.

Raise the costs of starting up, operating and expanding businesses, of investing in entrepreneurial ventures, and of creating jobs, while extending payments for joblessness. This is an agenda for economic failure, not economy opportunity.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council