Why Don't We Listen To The Job Creators?

Why aren't employers hiring? That's a pretty relevant question right now, given recent disappointing job numbers--only 69,000 new jobs added to the U.S. economy in May. It's also relevant because "Where are the jobs?" was the chant directed at Obama surrogate David Axelrod by a group of Romneyite hecklers in Boston. And finally, it's relevant because I've just had a Facebook exchange (with my big sister) that focused on the issue,* and I do take my Facebook exchanges seriously (especially with my big sister).

Thus provoked, I decided to seek out some actual facts that might explain the situation--such as, what do "job creators" themselves say when asked why they're not hiring? The first Google citation led me to a Gallup poll from January that provided the following survey results:

"Why are you NOT looking for new employees?"

Don't need any additional employees at this time 76%

Worried revenues or sales won't justify adding employees 71%

Worried about the current status of the U.S. economy 66%

Worried about cash flow or ability to make payroll 53%

Worried about the potential cost of healthcare 48%

Worried about new government regulations 46%

Worried you may no longer be in business in 12 months 24%

Some other reason 20%

Granted, this survey is a few months old, but I suspect it pretty accurately mirrors the current business environment. The first thing I'd like to note is the absence of "taxes too high" on the survey (perhaps it's one of the "Some other reason" responses that brought up the rear, along with "concern that the President isn't a citizen"): this, despite the fact that corporate taxes (along with regulations) are one of the two economic bogeymen which Republicans are dedicated to slaying. The second thing--and, to me, this is truly astonishing--is that the article (date 2/15/12) in which I found this Gallup survey was titled "Health Costs, Gov't Regulations Curb Small Business Hiring". That headline could be considered a distortion of the poll's findings; less generously, it could be considered an outright lie.^

The top four reasons given for not hiring (the first three, by a large majority of respondents) can be summarized in a single phrase: "lack of demand"--not enough customers and no confidence that more customers will be available any time soon. "Lack of demand" is why employers aren't hiring. To the extent that the politically popular red herrings of "Health Costs" and "Gov't Regulations" are even a factor, the survey doesn't indicate that such costs and regulations are currently burdensome; respondents were asked instead about "potential cost of healthcare" and possible "new government regulations". These theoretical concerns, incessantly Trumped up and exacerbated by right-wing rhetoric, pale beside the present gloomy economic reality, which is, to repeat, "lack of demand". In the absence of demand (i.e. customers), employers aren't going to expand their businesses or their payrolls, not even after President Romney royally repeals and revokes the entire Obama era.

I won't speculate** on how to cure "lack of demand" or even on what, if any, role the government should have in doing so. I just want to make two related points. First, if anyone tells you that businesses aren't hiring because they're overtaxed and overregulated, that person doesn't know what they're talking about. And second, the monotonously offered Republican "solutions"--lowering corporate taxes and getting rid of government regulations--will certainly increase corporate profits; but corporate profits aren't the problem^^. Jobs are the problem, my friend, and until there is enough consumer demand in this economy to justify businesses hiring more people, then jobs will remain the problem.

Not even voting for Mr. Moneybags from the Monopoly game will change that.

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*Frustratingly, the exchange kept veering from "Where are the jobs?" to "Who's gonna pay for that?" every time I mentioned some Obama proposal to help create jobs. I tried explaining that Mitt Romney and the Koch Brothers would pay for it all, but my interlocutor (my big sister) remained dubious.

^I'm not feeling all that generous; the sluggish economy has me in a bad mood. Either Dennis Jacobs, the "Chief Economist" who wrote the article about the Gallup survey, was lying about what it showed, or whoever added the headline was lying--or both.

**Not right now, at least. Besides, I believe I may have previously opined, and at some length, on the subject. The short version: our 30-year experiment of basing the economy on the whims and preferences of the top 1% has run disastrously aground. It may be true that a rising tide lifts all boats, but it also turns out that the rich alone can't keep the economy afloat--you need widespread, shared prosperity for that. (See "1950's, Eisenhower-era tax rates, organized labor"etc.)

^^In fact, they're at an all-time high. Shocking, I know--record corporate profits, under Obama!

Comments

[Jack Shifflett]

Well put, Mr. Kincaid--you should have a blog of your own! I especially like your eloquent summary of Maslow's Hierarchy: "food, water, shelter, blah, blah, blah". And why are none of us retorting to today's "certainty" meme with "The only things that are certain in life are death and taxes"? Finally, I apologize for not having cleared with you the use of your name; I forgot your desire, and your need, for anonymity. I won't do it again, I promise.

[Mike Kincaid]

You can imagine my surprise seeing my name in print on some sort of pinko, commie blog. I was certain that the authors of such things maintained their anonymity by creating ridiculous persona's, like Donald Trump, Sarah Palin or Chris Matthews. That was my opening line for my response to the May 21st posting. The posting was delayed since it appears that you cannot cut and paste from a word document to this pinko, commie blog, apparently designed by the same folks that came up with the Moskvitsch or the Trabant. Anyway the blog of May 21st rambled about certainty in the business community versus certainty for the labor community. This looks like a easy place to post this nonsense, instead of scrolling back to May 21st.
Yes, I would like some certainty in my life. Certainty regarding interest rates would be nice, but I am unsure about certainty of stock prices. I guess certainty that I will not lose money is desired, but lets keep it uncertain about how much money I will make, just for fun. It is curious that the "job creators" are not creating jobs due to the "uncertain" market, tax climate, odious regulation (like Nixon's EPA), but what is certain is that unemployed people cannot buy their products.
Certainty versus "individual choice" or bad dumb luck, may be a better route towards civilization. A good starting point may be the base of Maslow's Hierarchy of Needs: food, water, shelter, blah, blah, blah. Food insecurity is 15% both in the U.S. and the world ( 1 billion world wide) and a billion people worldwide lack access to clean water. I bet a few of those folks would like a little certainty in their lives.