Today’s jobs report was much better than expected—227,000 jobs added in January, up from 157,000 in January, and beating expectations by 50,000. Labor force participation, however, remains at 1970s levels. There is clearly still a great deal of slack in the labor market.
What the news might mean is that employers are starting to respond to the promise of substantial deregulation by the new administration. We are beginning to see those promises put into action, such as today’s announcement that a host of financial regulations that have led to small business lending seizing up will be rethought.
There is plenty more for the administration to do. Environmental regulations are particularly burdensome on the construction industry, which is where the jobs really popped this month. Moreover, labor regulations such as the Obama administration’s approach to “joint employer” status and worker classification have been holding back employers in franchising industries and sectors where contracting is common.
Yet it is not just the administration that has to act. Congress needs to look at fundamental changes to labor and employment law, environmental law, and laws that affect business financing. The Competitive Enterprise Institute’s Agenda for the 115th Congress sets out a series of reforms that will reduce the regulatory burden on innovators, entrepreneurs, and employers and thereby help get Americans back to work.