If there is one thing that businesses want more than anything else when it comes to regulations, it is predictability. That’s one case where what’s good for businesses is unambiguously good for the rest of the country too. Friday’s lackluster jobs report from the Labor Department is stark evidence of what happens when that certainty is lost—and of who pays the price for it.
Sure, businesses will lobby for changes to the rules and regulations they operate under if they think that is possible. But they’ll accept and adapt to the rules if they can be sure that those rules will remain in place for the foreseeable future. Business have to plans months and years in advance. They cannot do that if they don’t know what the rules will be when tomorrow arrives. If they can’t do that, then job creation becomes sluggish.
The nation gained only 235,000 jobs in August, well below predictions. The numbers almost certainly reflect a return to restrictions and mandates in the wake of the delta COVID variant, mainly mask and vaccine requirements. Though well-intentioned and less severe than what we’ve seen in the past year and a half, they still represent a sudden reversal following months in which the country appeared to be returning to normal—or at least something reminiscent of the normal from before the lockdown.
That whiplash has businesses pulling back and reassessing, especially small businesses that cannot afford a wrong move. Many companies have even begun imposing their own restrictions. In August, the number of people who reported being unable to work for pandemic-related reasons was 5.6 million, an abrupt rise of 400,000 in a single month. The leisure and hospitality industry, usually the first to feel the effects of COVID-related policies, reported no gains in August. A loss of 42,000 jobs in restaurants and bars wiped out all other gains. The concert industry is struggling after earlier believing that it could return in the summer. Business travel and tourism have receded, hitting the travel industry hard. Consumers are getting more cautious too.
The surge in cases of the delta variant is obviously troubling and some caution is deserved. But there are serious economic costs that need to be weighed too, as well as psychological ones. Many people have been without consistent employment for the last year and a half. Small business owners have had to defer plans and dreams. We need a light at the end of the tunnel, not the constant ringing of alarms.