Jim Ryan Jr.

blogger

President Obama recently announced that he will require companies to increase overtime pay, an executive order coming on the heels of his push to impose a 40% federal minimum wage increase. These are just the latest examples of an administration that since 2008 has made life more difficult for business owners, from large corporations to sole proprietorships. It is not surprising, therefore, that fewer Americans are working today than in 2008 and the labor participation rate in the country has fallen to 63% of the population, a 3 percentage point drop in just 5 years. There will be those that applaud the new coercive regulations and ask "What is not to like about higher wages?". If only wealth creation was that simple.

Although these laws will put more money in the pockets of some, others will be laid off. Even the government funded CBO acknowledges that as higher costs are unilaterally imposed on business, jobs will be lost. Increasing costs will drive profitability lower and make no mistake, profits are the only reason that jobs can exist in the private sector at all. With every new cost or regulation comes one more obstacle in the path of tomorrow's business owner. Employee gains will come at the expense of employer losses and with it the disincentives to hire will continue to increase.

The latest Heritage Foundation report on Economic Freedom affirms this reality showing that the US has declined in economic freedom for 6 consecutive years and has dropped out of the world top 10 for the first time ever. As we continue to shackle current and future job creators with more government edicts that increase costs and decrease returns, who among us will want to put money at risk to be the nation's next employers? If we, our friends, our relatives and our neighbors opt out of the role of job creators, how exactly will tomorrow's jobs be born? As the President continues to fortify only the rights of labor without regard for the freedom of employers, we can only expect to see jobs disappear and at the continuing frantic pace.