Here’s Why Small Business Isn’t Hiring, And Won’t Be Hiring

Tuesday, July 12, 2011
By Paul Martin

by Charles Hugh Smith
ZeroHedge.com
07/11/2011

The reasons why small businesses aren’t hiring are structural; the dearth of jobs is not temporary, and this is not a “soft patch,” it is quicksand.

The low job growth in the U.S. isn’t a “soft patch,” it’s a sea of quicksand. In a nutshell, here’s the situation: 2/3 or more of all job growth comes from small businesses starting up and expanding; only a third or less of new jobs come from Corporate America or government expansion.

As recent reports have shown, Corporate America has been on a hiring spree–overseas. From the point of view of globalized Corporate America, why hire anyone in a slow-growth market like the U.S.? It makes sense to hire new employees in fast-growing markets where the corporation is reaping its growth and most of its profits.

As for government hiring: the game of expansion based on explosively rising debt or Federal stimulus spending is over. To live within their means, local goverment and related agencies will have to shed jobs, as labor accounts for 80% of government expenses.

That leaves any future expansion of jobs up to small business. But small business isn’t hiring, and won’t be hiring, for these structural reasons:

1. The high costs of cartel healthcare, a.k.a. Sickcare in the U.S. Corporate America and small business share one millstone: the absurdly high costs of healthcare in the U.S., which have been pushed onto the employers more as a historical accident than out of rational policy.

The Rest…HERE

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