Not good news: the most important engine of long term American growth isn’t firing on all cylinders. The Wall Street Journal:
Small might be beautiful. But it hasn’t been bountiful lately.Fiscal fourth-quarter results Wednesday from payroll-services firm Paychex Inc. will likely reflect the lackluster and inconsistent spring seen by many small businesses. […]Just 119,000 jobs were added in March, for example. While April and May saw the overall jobs market perform better, small businesses—which make up most of Paychex’s customers—had a rougher time.The Paychex IHS Small Business Jobs Index, for example, decreased 0.17 percentage points in March from the prior month, climbed slightly in April and declined again in May. Year over year, this measure of small-business hiring was off by almost a half a percentage point by the end of May. Paychex chief Martin Mucci described this slowing growth as “not ideal.” […]Small business optimism, according to the National Federation of Independent Business survey, is in a “holding pattern” and shows no signs of breaking out soon. Until it does, Paychex shares aren’t likely to either.
Especially in times like the present, when the shift from the manufacturing economy to the information economy is the most important business of the nation, the health of small business may be the most important indicator of long-term growth. More than ever, America needs hundreds of thousands of creative new small businesses led by entrepreneurs looking to use the riches of the information economy to provide new products and services. That is how, over time, a new economy can provide the new jobs that will replace the ones being automated, or outsourced.Unfortunately, that doesn’t seem to be happening as fast as it should in a time of cheap money and relatively cheap labor. A number of factors are at work, but the presence in Washington of an administration that deeply believes that more regulations makes life better is clearly part of the problem.Big businesses can cope pretty well with regulatory uncertainty and regulation creep. When the minimum wage jumps to $15 an hour in a big city, a chain of drugstores can afford to install expensive automatic check out machines to replace all those human workers with some nice robots who won’t get $15 an hour plus overtime plus health care. A start up doesn’t have that freedom. At just the moment when our economy desperately needs a wave of innovation and small-scale entrepreneurialism, the Left has decided to do everything in its power to make the American system as inflexible and corporatist as possible.