Just how hot is today’s economy? One of the best indicators is the unemployment rate. Right now, there are Americans old enough to vote who haven’t seen numbers this good in their lifetime. Nationwide unemployment is tied for the lowest rate in 50 years—3.8 percent. According to the Bureau of Labor Statistics, Black and Hispanic unemployment is now 5.9 percent, the lowest on record. Jobs available outnumber the jobless for the first time ever.
For those of us who have wrestled with the aftermath of the Great Recession in our professional years, those numbers have even greater significance. Eight years ago, unemployment was at 10 percent. Now, this spring, Ohio unemployment shrank to 4.3 percent—the lowest this century. Job growth in the first quarter of this year has already exceeded last year’s total increase.
And there’s no end in sight to the employment expansion. Last month alone, 213,000 jobs were added to the economy. Not only did that figure surpass rosy expectations, it captured job growth spread robustly across a variety of industries. While only a few sectors of the economy contracted, fields from education and health to construction all saw significant, five-digit gains.
From a Great Recession high of six people unemployed for each open job, there’s now more than one open job per unemployed person. Today, a record 6.7 million jobs are open, and underemployment is at 7.6 percent, the lowest since May of 2001.
No wonder more than two-thirds of respondents tell Gallup pollsters it’s a good time to find a quality job.
Of course, good jobs mean good wages. And as growing businesses have reinvested to compete for talent and attract part-time workers to full-time jobs, wages have increased too. Average hourly wages are up nearly 3 percent year-over-year. With 58 percent of small businesses hiring or trying to hire, wages have increased at 35 percent of small firms. In April, according to Paychex, small business wages outpaced the average, growing by 3.25 percent.
So, what’s behind such eye-popping job and wage numbers? Partly momentum. I’ve been in business over 30 years. The electronic manufacturing business has taught me that, while our economy thrives thanks to a diversity of different industries, real growth and prosperity is powered by the way industries overlap and work together to deliver results that reach from Main Street to markets around the world. All meaning that a little focused energy can have a big ripple effect.
But good public policy has added fuel to this fire. For instance, the recent biggest small business tax cut in the nation’s history took effect. With these savings, owners can reinvest in their businesses and workers—expanding opportunity and prosperity on Main Street. Most respondents to Bank of America’s latest small firm survey say the tax cuts are a “game changer,” and even more say the cuts make them more optimistic about their business outlook.
The provisions of the Tax Cuts and Jobs Act (2017) should be made permanent!
For states like Ohio—where almost half our private sector is employed by small firms, and nearly all our firms are small ones—the impact of these tax cut savings cannot be overstated.
Today most Americans say the economy is strong—68 percent in a recent Harvard-Harris poll. More say the country is headed in the right direction than at the time of the last nationwide elections. And majorities say the economy is going the right direction, while approving of the way the current administration is handling the economy and jobs.
Today’s economic policies are paying powerful, sustainable dividends. Good public policy that allows small businesses to keep more of their earnings is partially to thank.
Gary James is the president of Dynalab Electronic Manufacturing Services.