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Public Statements

Not All U.S. Workers Have Something to Celebrate This Labor Day

Statement

By:
Date:
Location: Washington, DC

The Labor Day weekend is a time for picnics, concerts and festivals that salute the contributions of American workers.

One of the biggest celebrations -- held annually along the Ohio River in Cincinnati -- is capped by a fireworks extravaganza said to draw up to 500,000 people. Unfortunately, meteorologists say a 60 percent chance of rain is possible Sunday, when Riverfest is to be held.

The forecast for some American workers is also cloudy.

The national unemployment rate seems stuck around 9.1 percent, which means about 14 million people don't have a lot to celebrate this Labor Day.

And 8.8 million more were working part time because their hours were reduced or they couldn't find full-time jobs. About 2.6 million others stopped looking for work, including about 977,000 who are discouraged because they think no jobs are available, according to a report released Sept. 2 by the U.S. Bureau of Labor Statistics.

The situation is not likely to get better anytime soon.
President Obama plans to speak on the subject Thursday during a televised speech before a joint session of Congress.

So far, his response to the poor employment picture has been to propose public works projects -- fixing bridges, patching potholes, laying railroad tracks, and sprucing up airports.

Their effect on the economy would be fleeting.

Government shouldn't try to create jobs -- it should create the environment that encourages the private sector to do so.

We need people to build homes, sell cars, open stores, and be willing to shoulder risk.

A major reason we can't jump-start the economy is that while new businesses are entering the marketplace, they plan to hire fewer people than economists would have predicted.

"Until the Great Recession, new firms in the United States generated on average about 3 million new jobs every year," said a recent report by the Kauffman Foundation, which studies entrepreneurial trends in the economy. "New businesses are vital contributors to a healthy jobs market."

But that isn't happening at this time -- at least not to the extent that would help snap the economy out of its stupor.

Startup companies are crucial hatcheries for jobs. This is where a significant portion of increasing demand for employees will arise. But, put simply, new businesses are skittish about hiring a lot of people.

This decline in hiring by new companies predates the recession that was declared over in 2009. But the "official" end of the recession did not stop the drop in job creation. In fact, that's about the time hiring by new businesses took a nose dive, tumbling by 700,000 uncreated jobs over the course of a year.

We need stability, and we need to restore confidence. As their confidence rises, businesses will grow and hire more people.

We need to reduce federal regulations that inhibit growth and job creation.

What we don't need is for the government to step in, borrow more money, and continue to add to the federal deficit in a futile effort to stimulate the economy.

I hope that's not the president's prescription Thursday night.


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