We keep getting told that economic recovery is underway, but the evidence remains stubbornly to the contrary. The most recent bit of bad news is the November jobs report, which showed the unemployment rate increasing from 9.6 percent to 9.8 percent. According to the report, only 50,000 private sector jobs were created — a puny number by any measure, and far below the kind of robust growth that is needed to make an appreciable dent in the unemployment rate.
Many people are citing general economic uncertainty as the reason for the failure of employers to hire, and I am sure there is truth to that. The fact that the federal government hasn’t acted on tax rates probably hasn’t helped, either; it leaves some small business owners wondering how much money they will have in the budget for new employees, and they aren’t going to hire before they know they can afford to do so.
I also wonder, however, whether the tough economic sledding over the past three years has permanently reduced employer confidence. Whereas before employers might have made new hires on the expectation of future growth, now employers may wait until the growth has actually occurred, and been sustained, before they break down and hire more workers. If that is the case, then we may be waiting a long time before the politicians’ constant promises of a job-filled recovery are realized.