Jobs Day Numbers Show Signs of Growth, Could be Bolstered Further by Small Business Tax Reform
Atlanta—Today, the Job Creators Network (JCN) highlighted that the March jobs report, released today by the Bureau of Labor Statistics, shows 235,000 jobs were created last month, and the unemployment rate remains low—dropping from 4.8 to 4.7 percent.
Although the report reveals positive job growth and low general unemployment, there is still a troubling trend in the labor force participation rate (LFPR) and broader measures of labor underutilization—driven by over-regulation, lack of access to credit and most detrimental, over-taxation. These indicators and the broader labor market can be improved by passing the Bring Small Businesses Back Tax Reform Act (H.R. 1425) – introduced to Congress this week —that would reduce the tax burden on small business job creators.
The report reveals a 63 percent LFPR, which is well below the pre-Great Recession historical average of 66 percent. The 3 percent gap indicates a disconnect between the general unemployment rate and the real unemployment rate that captures those workers who have dropped out of the labor force. The real unemployment rate when factoring these people in is 9.1 percent.
Although some of the reduced LFPR may be due to natural cycles of national demographic shifts—the LFPR of “prime-age” workers between the ages of 25 and 54 is also hovering near a generational low. In fact, the unemployment rate including part-time and marginally attached workers is 9.2 percent.
The low LFPR undertow in the labor market belies what seems to be a healthy economy. In order to fully rejuvenate the labor market, we need to strengthen and expand small businesses and their potential to create new jobs. One way to do that is through business tax reform.
So this week Representatives Randy Hultgren (IL) and Jason Smith (MO) introduced the Bring Small Businesses Back Tax Reform Act (H.R. 1425)—which would reduce the tax burden levied onto our nation’s largest job creators, small businesses. More specifically, the bill would lower the tax rate on the first $150,000 of small business income to only 12 percent, and to 25 percent for all income above that threshold. It would also simplify the tax filing process so small business owners can focus on running their companies and creating jobs.
Alfredo Ortiz, president and CEO of the Job Creators Network, and Stephen Moore, distinguished fellow at the Heritage Foundation, had an op-ed in The Hill this week highlighting the legislation. Read the op-ed here.
“The U.S. job market is in an ambiguous situation—mainstream economic indicators point towards a healthy economy, but the low labor force participation rate tells us otherwise,” said Alfredo Ortiz, President and CEO of the Job Creators Network. “But this can be fixed. We can empower small businesses—through small business tax reform—to expand their businesses and hire new employees. Not only will this boost the American economy, but it will provide relief to the 85 million people who depend on the success of small businesses.”
The Job Creators Network (JCN) is the voice of Main Street and holds politicians
accountable to job creators and workers alike. For more information, please visit www.JobCreatorsNetwork.com.