BLS: Low Demand, Not Regulation, Is The Key Obstacle To Job Growth

September 30, 2011 2:01 pm ET — Matt Finkelstein

When it comes to fixing the economy, it's only natural that conservatives would trust employers more than experts in the government or academia to diagnose the source of the problem. But since congressional Republicans refuse to acknowledge the concerns of business owners who consistently blame the scarcity of jobs on lack of demand — and not overregulation — perhaps they'll be interested in what the Bureau of Labor Statistics has to say.

Dave Weigel calls attention to a BLS chart documenting the reason behind private-sector layoffs in the past year, which shows the percentage of layoffs caused by "Governmental regulations/intervention" was less than a half-percent in each quarter analyzed. Despite an uptick last quarter in unemployment claims blamed on regulations, the chart clearly demonstrates that the far greater problem is low demand.

While most Republicans have sworn off the very concept of demand, GOP presidential candidate Mitt Romney acknowledged this week that businesses aren't hiring because they don't have customers, and bizarrely claimed President Obama "doesn't understand" that dynamic. Unfortunately, Romney's answer to low demand is a combination of supply-side tax cuts and deregulation instead of, say, infrastructure investments, unemployment benefits, and middle-class tax relief that would put more money in the average customer's pockets.