PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Small Business Checkup Survey: The Labor Market and Future Hiring

By at 9 January, 2024, 7:57 pm

by Raymond J. Keating –

As I explained in an SBE Council analysis, the latest employment report from the U.S. Bureau of Labor Statistics presented two stories on the state of the labor market in December 2023 – one generally positive and the other distinctly negative.

Given this mixed, at best, data, and the importance of small businesses to job creation, what did small business owners have to say about the labor market in SBE Council’s latest “Small Business Check Up Survey”?

Here are a few points:

• 41 percent of small business owners cited “labor shortages and access to skilled labor” as a negative impacting their enterprise.

• 62 percent of small business owners are unhappy with the labor market in terms of being able to find the employees needed – with 39 percent considering it only fair and 23 percent rating it as poor.

• In terms of hiring over the coming six months, it was noted: “Overall one-third (32%) plan to increase employment in the next six months, while half (50%) plan to maintain current levels. A handful (13%) plan to downsize.”

Indeed, challenges persist.

As noted in my December jobs report analysis, when talking about a tight labor market, it’s important to understand that this is largely about a stagnant and aging U.S. population. That speaks to larger problems now and into the future regarding labor costs and diminished entrepreneurship, which in turn, will hit economic and income growth.

A serious policy agenda when it comes to the labor market requires reduced governmental costs – such as taxes and regulations – in terms of the incentives for working and hiring, and a welcoming immigration agenda that opens the door to much-needed workers up and down the skills ladder, and to increased entrepreneurship.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist and The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist.

 

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