America’s unemployment rate is still stuck at 9 percent and nearly 14 million people are out of work, yet since the recession ended, job losses have fallen well below their pre-recession rates. So why are so many still out of work? Record-low job creation is the problem.
In a new paper, Heritage’s James Sherk explains that unemployment remains high because job creation has fallen. In the following chart, you can see how private-sector employment would have changed if job creation returned to pre-recession levels in June 2009. (Article continued below infographic.)
Unfortunately, the economic picture today isn’t as bright as it is in the above alternate reality. Sherk lays out the numbers behind the poor job growth.
From the recession’s onset to the first quarter of 2009, private job creation fell by 24 percent to 5.8 million jobs. That was the lowest quarterly job creation on record. Since then, job creation has only slightly recovered. In the first quarter of 2011, employers created just 6.3 million new jobs—1.3 million fewer jobs than in the quarters before the recession began.
Fewer existing businesses are expanding, while fewer entrepreneurs are starting new businesses. In the first quarter of 2011, the number of workers hired in new business establishments fell to just 660,000, 27 percent fewer than when the recession began. This is the lowest number of workers hired at new businesses that the Bureau of Labor statistics has ever recorded—lower even than the worst points of the recession.
The drop in hiring at new businesses has occurred because entrepreneurs are starting fewer enterprises and because they are hiring fewer workers per new enterprise. The average number of workers hired at new establishments fell to 3.6 per business in Q1 2011, also the lowest on record.
Read more of Reduced Job Creation—Not Increased Layoffs—Explains High Unemployment at Heritage.org.
Sir, the very first thing that I learned, when I began working with statistics & computers, 40 yrs. ago, was "Garbage in, garbage out!" I think that you are looking through rose-colored glasses. I think that you will eventually find that you were given faulty data. The Recession hasn't even begun to end. In all probability it is going to get far worse than we have yet seen. In statistics, if you are using faulty numbers, you are going to get faulty results. Those who provide the numbers can provide numbers which will say anything they wish. Not everyone is so honorable as Heritage.
How many times must heads of corporation, companies, and small business state on camera the reasons they are not expanding or hiring is Obama! His hatred of free enterpriseand capitalism plus his Marxist ideology of full government control, is destroying our economical system, by shoving more and more regulations down the throats of the American business men and women.
I thought a story was supposed to have 4 parts, who, what, when, why. I didn't read a "why."
if "we" don't do this, this will happen. if "we" don't do that, that'll happen.
what is his goal when what he wants to do clearly reveals foreseeable crisis? he refuses all sound advice to call it "we?" he continues to insist on designed failure over what works? what happened to America? How come no one is protecting her? this man sounds like whatever threats he claims will happen he will make sure, does. set ups and trap settings. I can't stand a man that takes full advantage (of America) when it's convenient for him then turn around by abusing power and use America against us! His ideas are designed to fail and nobody is stopping this? America use to avoid crisis, not tight rope on top of it. ooh look what will happen if America doesn't do what the president dictates. oops, happened anyway. oh well, America, you'll continue to sacrifice from government actions outside OUR control as government actions are meeting expectations.
get the President out of the private sector, he shows poor and failed performance with no favor to the people he serves and he's unconstitutional.
Why…. the best question. As an experienced business man I have several observations. First, related to Lloyd's comment, when the government threatens small business the business man has to evaluate the risks of moving forward to hire more people. In my business, if we add two more employees, we will have to pay for 4. This is because of the government requirements for hiring 20 or more people. Which means if I hire two more people for labor I get stuck with mountains more paperwork "for the government requirements" in which I would have to hire another person to handle that paperwork. Plus, because of the " time off" benefits, paid vacations, leave, etc. I end up with 19 labor people in hours. This all translates to a huge waste of time, effort, money, and the problems of more employees to deal with. It is much easier to work overtime to satisfy the customer demands than to hire more people. Plus the side effect of not hiring those extra people is: 1. the bottom line is more positive. 2. We have much less problems to deal with that eat up productive time. 3. I have also seen that as you hire more of the people who don't want to work or that have too much personal problems to deal with, the more mistakes get made which again reduces quality, productivity, and harmony in the work place. So Why?
The government needs to admit this and make it more attractive for business to hire and care for more people. Not look at business as the "enemy" and crush it with the paperwork, and cost burdens, and more threats to scare us with. The political rhetoric we hear with this administration will get US ( A ) nowhere. Class warfare is the enemy to divide this country. The opposite should unit it.