How Government Regulations Are Undermining the Job Market

Those on the Left are arguing that government regulations have a negligible effect on layoffs.  The Center for Economic and Policy Research (CEPR), for instance, argues that because a small number of businesses attribute government intervention as the cause for the layoffs (see Bureau of Labor Statistics data), we shouldn't have to worry.  I don't even want to get into the argument that the regulations do their damage subtly enough that most businessmen would not be able to accurately attribute government regulations to layoffs.  What I would like to point out is that it is the same Bureau of Labor Statistics (BLS) that recently announced that the level of layoffs are at pre-recession levels.

I'm sure my friends or colleagues on the Left will tell me that we need to have the government intervene in order to help bring up aggregate demand to pre-recession levels (i.e., Keynesian policy of government stimulus spending).  If the issue were consumption, then our levels of consumption would be at lows not seen for quite some time.  However, looking at Bureau of Economic Analysis consumption data (take particular note of the personal consumption expenditure data, especially this one), consumption has exceeded pre-recession levels.      

If job layoffs are at a low not seen for quite one time, and consumption is "back to normal," then there must be some other explanation as to what is plaguing the job market.  The issue facing the job market is that of job creation, as BLS data indicates.  Let's not even consider that a recent Gallup poll of small business owners shows that government regulations are at the top of their list of problems.  Last year, the Small Business Administration (SBA) published a study outlining how government regulations costs small business roughly ten thousand dollars per annum.

I don't know about you, but if I were a small business owner, I would be hard-pressed to hire new employees.  Between the implications of Obamacare for small businesses, the ephemeral nature of the tax cuts, and the increasing amount of regulations that have been implemented since the beginning of the Obama Administration, there is a lot of uncertainty taking place.  Small businesses need some reassurance that economic times are going to get better, and it cannot be done with hollow rhetoric.  If you truly want to help small businesses feel more confident that they can afford to hire new employees without going out of business, de-regulation would go a long way.