Wednesday, January 12, 2011

An outlook on jobs

Thomas J. Donohue, President and CEO of U.S. Chamber of Commerce, has this forecast:
We believe the economy will expand by 3.2 percent in 2011 and create 2.4 to 2.6 million net new jobs by the end of the year.

Unemployment has exceeded 9 percent for 20 consecutive months. That hasn’t happened since the 1930s. Some 27 million Americans are either unemployed, underemployed, or have given up looking for work.

Let’s suppose we do create about 2 ½ million net new jobs this year. As welcome as this would be, it would only drive the unemployment rate down by about one percent.

In fact, we must create 1.2 million jobs a year just to absorb the new entrants into our workforce. On our current course, it could take years to get back to where we were before the recession and the financial crisis hit.
The number one problem in creating new jobs is the government, he says.
For example, the new health care law creates 159 new agencies, commissions, panels, and other bodies. It grants extraordinary powers to the Department of Health and Human Services to redefine health care as we know it.

The regulatory tsunami is also about to wash over our capital markets. Dodd-Frank contains 259 mandated rulemakings, another 188 suggested rulemakings, 63 reports, and 59 studies. My grandchildren will be old and retired before it is all implemented.

Job creators are also facing unprecedented regulatory activity and case law changes in the Department of Labor, the National Labor Relations Board, and similar agencies. Over 100 such efforts are underway covering compensation, contracting, leave, ergonomics, workplace safety, hiring and firing, and union organizing.

While EPA is starting with the largest emitters, it could eventually regulate 6 million entities—including small businesses, hotels, warehouses, and even churches. Beyond greenhouse gases, EPA’s regulatory agenda lists 342 rulemakings in various stages of development and completion. Of these, 30 are deemed “economically significant”—each with a cost to our economy of $100 million or more.
Business has to follow the rules, but what small business can now even know what the rules are?

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