Chairman Graves in The Hill: Small Businesses Are the Solution to US Unemployment
Small Businesses Are the Solution to US Unemployment
Last summer, the president lauded a supposed “recovery summer” initiative that celebrated the “success” of the administration’s stimulus plan. However, during that span of time, the U.S. economy shed jobs for three straight months, and unemployment edged up to 9.6 percent.
Following the one-year anniversary of the “recovery summer” last month, let’s re-evaluate Washington’s economic growth policies of the last few years, and whether they have worked.
Here are the facts:
Last Friday, the U.S. Department of Labor announced that unemployment in June rose to 9.2 percent with just 18,000 jobs created, well below the 90,000 to 125,000 economists had been expecting. This means June marks the 29th consecutive month that unemployment has been at or above 8 percent— the level the president said unemployment would never reach if the stimulus passed.
The number of unemployed Americans edged up by 173,000 to more than 14 million in May. In the two years following enactment of the stimulus spending bill, more than 1.5 million jobs have been lost and the unemployment rate has averaged 9.5 percent.
What’s more, the continued stall in June further depressed average monthly job creation this year to 126,000 — an amount far short of the more than 300,000 jobs per month needed over a sustained period of time to meaningfully drive down unemployment.
The most telling statistic from last week’s unemployment revelations was one that came from the payroll company Automatic Data Processing. It reported that businesses employing fewer than 50 workers added 88,000 jobs in June, up from just 27,000 in May. This is further proof that small-business growth is essential to our nation’s economic prosperity. Small businesses create seven of every 10 new jobs and employ just over half of the country’s private-sector workforce.
Despite its importance to our economy, the future is dim for many small businesses. According to a Chamber of Commerce report released on Monday, almost two-thirds of small-business executives surveyed said they weren’t expecting to add to their payrolls in the next year, and another 12 percent planned to cut jobs. More than half cited economic uncertainty as the main reason for holding back on hiring.
Under this administration, small businesses have been burdened by the constant threat of tax increases, inconsistent flow of credit, an outrageous national debt, high energy costs, overreaching federal regulations and the looming ObamaCare mandates. What they need is a more certain economic environment driven by fiscal discipline, a sustainable path of less government spending, lower taxes and fewer burdensome regulations.
As Washington considers a deal to raise our debt ceiling, we have the opportunity to promote these very principles in a plan that will have a profound impact on economic growth over the next 12 months. Any deal to raise the limit should be focused on removing barriers to small-business job creation. And, beyond the debt-ceiling debate, there are several other steps Congress is ready to take to right our economic ship.
The Small Business Committee has held numerous hearings that have focused on small-business job creation, including hearings on the ObamaCare 1099 requirement, small-business access to capital and programs to spur technology and innovation. On Tuesday, our committee marked up a bill that would protect small businesses against job-killing, overreaching regulations. The Regulatory Flexibility Improvements Act would require the administration to consider the effects of rules on small businesses before enacting new regulations.
In May, House Republicans put forth a “Plan for America’s Job Creators” that includes common-sense policies to remove uncertainty by reducing regulatory burdens, lowering business tax rates to 25 percent, spurring exports by quickly passing the pending free-trade agreements and introducing a budget that gets our nation’s fiscal house in order.
In addition, the new House majority has been focused on jobs since day one, passing nine separate bills that can grow our economy and help create millions of jobs. But we can’t do it alone. We need the president and Senate Democrats to join us. Unfortunately, only one of our jobs bills has been signed into law — the repeal of the 1099 ObamaCare requirement.
Providing certainty for America’s small businesses should be the No. 1 priority for Washington, considering they are the backbone of our nation’s workforce and the engine of our economy. I hope we can put politics aside and work together to grow our economy by helping our nation’s most dynamic job creators — our small businesses.
Graves is chairman of the House Small Business Committee.