On Friday, when the Bureau of Labor Statistics released its report that another 20,000 Americans had lost their jobs in January, the right-wing spin machine immediately unleashed one of their tried-and-true talking points: that the reason the economy is not creating new jobs is “uncertainty” created by Democratic policymakers in Washington. But ask businesses themselves why they’re not hiring, and they say their top uncertainty is whether they will have enough customers to stay in business, much less expand.
On Friday, House Minority Leader John Boehner released a statement that said, in part,
“Hiring grows from investment, and businesses and investors need clarity. Instead, the President, Speaker Pelosi, and Leader Reid perpetuate an environment of uncertainty with the threat of even more mandates and red tape, skyrocketing deficits, and tax increases that prevent job creation. Democrat controlled Washington’s ideological pursuits – like cap and trade, tax increases, the push for government health care, and card check – have created such great uncertainty that hiring is simply not a reality for businesses and entrepreneurs.”
Likewise, the Heritage Foundation’s daily Morning Bell email on Friday included this screed:
The real way Washington could create jobs is by getting out of the way. Fred P. Lampropoulos, founder and chief of Merit Medical Systems Inc., told the President in December that businesses were uncertain about investment because “there’s such an aggressive legislative agenda that businesspeople don’t really know what they ought to do.” That uncertainty, he added, “is really what’s holding back the jobs.”
There does not appear to be a single credible shred of evidence—such as a poll from a nonpartisan, nonideological organization—that the average Main Street employer — who, conservatives continually remind us, is more often than not a small business owner — is not adding employees primarily because he or she is quaking in fear of what Democrats are doing in Washington.
In fact, that’s not even supported by the latest survey this week from the National Federation of Independent Business, a foe of much of the progressive job-creating agenda and an echo for many of the right-wing talking points. The summary of its “Small Business Economic Trends” report says, in part:
Owners complained that “poor sales” was their top problem, and there is no need to hire with no new customers. It is hard for workers to “earn their pay” in this environment, a necessity if a firm is to stay in business. Ten (10) percent (seasonally adjusted) reported unfilled job openings, unchanged from December but historically low. Over the next three months, a seasonally adjusted net negative one percent of owners planning to create new jobs, a one point improvement, but still more firms planning to cut jobs than planning to add.
Businesses were also asked what was their “single most important problem.” Thirty-one percent said “poor sales,” 22 percent said “taxes” and 13 percent said “government regulations and red tape.”
When businesses were asked if they thought the next three months were a good time to expand and were asked to explain their answer, 51 percent of respondents said it was a bad time to expand because of “economic conditions” (compared to only 1 percent who saw the next three months as a good time to expand) and another 11 percent cited other money-related factors as driving their negative outlook. Only 11 percent cited “political climate” as a negative factor in their expansion plans.
An NFIB analyst stressed the importance of consumer weakness in a Bloomberg news service article on small business conditions published Monday.
Consumers are cautious, and that’s keeping owners of small firms on the sidelines, said Holly Wade, a National Federation of Independent Business policy analyst, in a telephone interview from Washington.
“They’re still apprehensive about hiring people, because they’re not seeing enough customers to translate into another worker,” Wade said.
The NFIB report also said that “regular borrowers (accessing capital markets at least once a quarter) continue to report difficulties in arranging credit at the highest frequency since 1983. A net 14 percent reported loans harder to get than in their last attempt, down one point from December.”
The report downplays the significance of tight credit markets, but the 11 percent who reported in January that they were unable to borrow the money they needed during the past three months is at a historic high; the share was 5 percent in January 2008.
The survey is not scientific—it’s limited to 2,114 NFIB members who responded to a questionnaire—but nonetheless, it lends credence to the argument that what Main Street businesses need are people with jobs and incomes that can support a consumer-led economic recovery, not failed trickle-down conservatism.
Only the federal government has the capacity right now to kick-start demand—by putting people to work on the jobs that will lay the foundation for the private sector growth that we all want to have. It is clear that the 2009 recovery legislation slowed the bleeding but was not nearly enough to get it moving forward at the pace it most move to begin generating the more than 400,000 a month we need. The only “uncertainty” hurting small business is if leaders in Congress have internalized that lesson or if they will keep cowering under certainly empty right-wing nostrums.
