The Jobs Situation

By at 9 February, 2021, 3:47 pm

by Raymond J. Keating-

No matter what data one looks at on jobs, we suffered dearly in 2020. There’s a long climb ahead to rebuild employment that will only be accomplished if we remove the obstacles placed in the path of entrepreneurship. After all, if one is serious about creating jobs, then we have to get serious about establishing the best environment in which job creators can flourish.

SBE Council noted the mixed story on jobs in January, and where we stand in terms of the labor force participation rate and the employment-population ratio. The key takeaway:  “So, progress has been made in regaining some ground on the jobs front. But much more ground needs to be covered to get back to pre-pandemic levels, never mind where labor force and employment levels stood before the previous recession of December 2007 to June 2009.”

Hiring is Down

The last time we looked at the “Job Openings and Labor Turnover” report from the U.S. Bureau of Labor Statistics the job shortfall once again was clear. The same goes for the latest “Job Openings” report. While much in the latest report remained largely unchanged in December versus November, including job openings, a key downgrade came in terms of hiring. As reported:

“In December, the number of hires decreased to 5.5 million (-396,000), and the hires rate decreased to 3.9 percent. Hires decreased in accommodation and food services (-221,000); transportation, warehousing, and utilities (-133,000); and arts, entertainment, and recreation (-82,000). Hires increased in retail trade (+94,000). The number of hires decreased in the South region.”

Jobless Claims Remain High

Finally, the most recent “Unemployment Insurance Weekly Claims” report from the U.S. Department of Labor offers a bottom-line comparison that, along with the labor force and employment data, further clarifies the challenges that remain:

“The total number of continued weeks claimed for benefits in all programs for the week ending January 16 was 17,835,525, a decrease of 486,405 from the previous week. There were 2,108,515 weekly claims filed for benefits in all programs in the comparable week in 2020.”

Total jobless claims stand at more than 15 million more than at the same time a year earlier.

Pro-Jobs Policy

For all the policy talk about near-term measures to provide relief, elected officials at all levels of government have to get serious about strengthening incentives for starting up, expanding and investing in businesses.

That does not mean that government should step in and attempt to guide or control investment, via some kind of industrial policy. In addition, new costs on small businesses – such as a big minimum wage hike – would destroy jobs and work against job creation.

Instead, tax and regulatory relief are needed in order to expand the freedom to capitalize on new and changing opportunities, which in turn generate economic, income and employment growth.

Get the policy mix right, and we will experience robust growth. Get the policy mix wrong, and we will experience an under-performing economy – as has been the case since the previous recession.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


News and Media Releases