Goldman Sachs analyst Spencer Hill suggests a combination of factors may lead to a 50 year low in initial unemployment claims. It is possible we may soon see the number drop below 200,000 for the first time since 1969. Leading causes include a shift in the workforce away from manufacturing industries, which have more cyclical staffing needs than others. Another is a decline in new business startups. A climate of increased regulation including mandatory healthcare – which has caused skyrocketing insurance costs, have led to fewer startups. Unfortunately, the statistics for new business startups is also approaching a 40 year low. See this article from 2016.
Because there are fewer small businesses, which can contribute to more layoffs as some fail, more employees are working for larger companies these days.
We need an environment that eases new business startups without stifling innovation. Unemployment numbers may look good now, but without innovation there will be longer term ramifications to our overall economy.
For the full unemployment article click here.
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