Welcome to the Vitus Capital Blog!
Notes to myself, possibly of interest to others.
-- Bill Northlich

Tuesday, July 19, 2011

"Uncertainty" The Root of All Evil!

NYT:  "Governors from around the country — including Christine O. Gregoire of Washington, a Democrat, and Scott Walker of Wisconsin, a Republican — said that employers in their states had been reluctant to hire new workers because of the uncertainty [over the debt ceiling]."

If there are employers who are seeing enough demand for labor that they would ordinarily be hiring new workers, but are not doing so because of uncertainty stemming from the debt ceiling, then we would expect that they are working their existing workforce additional hours. This one is easy to check.

Here's what average weekly hours looks like according to the Bureau of Labor Statistics.
Source: Bureau of Labor Statistics.

See the jump in hours due to the uncertainty? That's right, it's not there. This means Governors Gregoire and Walker and the rest either do not have a clue about what is going in the labor markets in their state or they are making things up.
---Dean Baker

Bill:  This issue is actually much easier to understand than reading the above. As I said here:
I've seen a number of articles (herehere), which say that the reason small businesses, the well-known primary generator of jobs, aren't hiring is that there are no customers.  I've not heard or seen or imagined any small business saying to themselves "Say, if I could just get a tax rate reduction, I'd hire a bunch of people".  Perhaps you have?  In other words, if you've ever been in a small business, you know that taxes, minimum wages, "uncertainty", etc, are secondary or tertiary issues to consider in running the business and hiring.
Oh, and this is interesting IMO.

Oh-2 (dead-horse-beating) - If you are in a small business, you live "uncertainty". Clearly, no one who cites "uncertainty" as a reason small business does or does not do something has ever had the remotest connection with an actual small business.

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