BY RUSSELL TURNER
JUMPING THE HURDLES
I always enjoy watching the Olympics, especially the track and field events. Just the simple contest of a foot race can be very exciting. One event that seems to be a tougher contest is when the runners are running down the track and have to jump over the hurdles. It is very evident that the hurdles do slow the runners down; if it weren’t for the hurdles the runners could cover the distance in a much shorter time. In America today the barriers that our government place on us do essentially the same thing as the hurdles on the track and field.
Last Friday the jobs report came out for the month of May and the economy only created 38,000 new jobs; many economists expected over 100,000 jobs to be created. The 38,000 number was the slowest pace of growth in nonfarm payrolls since September 2010. Many things are contributing to the problem of the low number. The GDP growth has been under 3% for the entire Obama administration. Current GDP estimates for 2016 are under 2%, these low numbers hinder a vibrant economy. The data also showed that a record 94.7 million Americans were not in the labor force last month, as the labor-force participation rate fell to just 62.6%. Another factor that is affecting the employment picture in this country is the disparity between the number of new businesses forming, and the number of businesses that have "died" and no longer exist.
According to an article in the Wall Street Journal there has been a steady decline in business formation while the rate of business deaths has been more or less constant. Business deaths outnumber births for the first time since measurement of these indicators began. We might wonder why this is happening, but if we would just take an objective look at the situation the answer is very simple. Anyone who has the desire to start a new business is often shocked to learn of all of the rules and regulations that he must comply with just to start a new business. In a 2010 report for the Office of Advocacy of the U.S. Small Business Administration, researchers at Lafayette University found that the per employee cost of federal regulatory compliance was $10,585 for businesses with 19 or fewer employees, compared with $7,755 for companies of 500 employees or more. These numbers show a clear pattern where the large established businesses are able to conform to regulations easier than the small startup businesses.
Another hurdle that the government puts in front of the startup companies is the over use of occupational licenses. In 1950, only 5% of workers required an occupational license or professional certificate. Today, that number is close to 30%. While the unemployment rate has shown some decreases, many workers have lost their full time jobs and have resorted to part time work to make ends meet. There isless movement to higher-paying jobs, and fewer prospects for career building and advancement — and that’s yet another roadblock to overall economic and job growth.
It seems ironic that our government is supposed to be looking out for the citizens of this nation but their very agencies and departments have the effect of causing barriers to a healthy economy. Maybe our government should embrace a novel idea. Let the free market system be just that and stop putting up hurdles.
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