The first Friday of the month is “Jobs Friday.” The day we all wait to see how our economy is doing or not doing when it comes to jobs. I have often criticized the report and the methods used to come up with the numbers and how easily they can be manipulated to serve ones political needs. One of the statistics that is very important is the labor participation rate.
The April 2014 report showed a labor participation rate of 62.8%. It has not been this terrible in three decades. For the youth in our country the numbers are even worse. The labor participation rate for 25-29 year olds is at its lowest level since the Bureau of Labor Statistics started tracking the data.
Labor participation tells us how many people in the country are working or are actively engaged in finding a job. Where did all these workers go?Did they disappear? Are they on the sides of milk cartons? Did space aliens abduct them?
Or…the more plausible explanation, there are little to no jobs available and if that’s the case, why?
A study by the Kauffman Foundation found that all net job creation in the United States between 1977 and 2005 came from firms five years old and younger. Couple that with the fact that half of all new businesses fail in their first five years. Therefore, practically all-new American jobs come from a tiny fraction of new businesses that go from startup to success story.
A new study from the Brookings Institution discovered that the American economy is less entrepreneurial today than at any point in the last three decades. Even worse, the last three years of the study found that businesses were collapsing faster than they were being formed. New business creation (measured as the share of all businesses less than one year old) declined by about half from 1978 to 2011.
Nobody wants to tread in a minefield. The government has been setting mines in front of entrepreneurs for decades and seems as if they are picking up the pace. An incomprehensible tax code, burdensome and ever changing regulations, and of course Obamacare. The positive spin on our jobs problem is that it is not a difficult problem to fix. It is real simple, no entrepreneurs, no jobs. We need to get small enterprise moving again. The best way to do that is for the government to clear the minefield and get out of the way.
Lee Mike EX-IM Bank And The GOP’s Cronyism Test National Review 4/7/14
Editors U.S. Businesses Are Being Destroyed faster Than They’re Being Created Washington Post 5/7/14