The PJ Tatler

Gloom, despair and agony: Why small businesses aren't hiring

Don’t read this article if you want to smile at any point in the next week or so.

The low job growth in the U.S. isn’t a “soft patch,” it’s a sea of quicksand. In a nutshell, here’s the situation: 2/3 or more of all job growth comes from small businesses starting up and expanding; only a third or less of new jobs come from Corporate America or government expansion.

As recent reports have shown, Corporate America has been on a hiring spree–overseas. From the point of view of globalized Corporate America, why hire anyone in a slow-growth market like the U.S.? It makes sense to hire new employees in fast-growing markets where the corporation is reaping its growth and most of its profits.

As for government hiring: the game of expansion based on explosively rising debt or Federal stimulus spending is over. To live within their means, local goverment and related agencies will have to shed jobs, as labor accounts for 80% of government expenses.

The author cites several structural reasons that small businesses aren’t hiring, and they boil down to: Healthcare costs continuing to rise; the fact that most politicos don’t have a clue about small business; the threat of lawsuits by employees against employers; and local governments treating small business like “tax donkeys.” All of this is structural, and there are no efforts on the table to deal with any of them. With so much standing against hiring, adding the headcount just doesn’t make sense for most small businesses.

Ok, I need to lighten the mood after that. Here’s about some relevant Hee-Haw tunage:

http://www.youtube.com/watch?v=FQ5ob9B9yD4

(h/t CR)