Employers must play the waiting game
Think inflation is taking its toll on Ohio employers only recently?
As reported by The Center Square recently, the Buckeye State’s record run of business startups ended months ago, when April’s new business filings were a 20 percent decrease from March and a 30 percent decrease from April 2021. But the slowdown has indeed worsened. New business filings fell by 16 percent in June.
In fact, the average number of new business filings per month is down nearly 1,000 from the average recorded in 2021. (To be fair, that was a record year.)
Secretary of State Frank LaRose’s office pointed to inflation’s effect on potential employers; and an American Staff Association Workforce Monitor survey suggested 60 percent of those workers who participated in the survey online are worried their paychecks will not be enough to continue to support themselves or their families.
Certainly it is an environment that could leave anyone a little skittish.
In fact, the same survey also suggested 28 percent of U.S. adults are planning to look for a new job in the next six months, and 27 percent plan to start a second job to supplement their income. Meanwhile, Ohio’s labor force participation rate was 62.1 percent for June 2022 — up just a bit from May. Mixed signals abound.
But while LaRose may seek to pin the business startup slowdown on those in Washington, D.C., who, he says are “sitting on their hands,” the U.S. Federal Reserve just made one of its boldest moves yet in trying to tame inflation. Recently, it enacted its second straight 0.75 percentage point interest rate increase.
It’s not as easy to address the inflation about which LaRose is worried without creating a recession as some might believe. Fed Chairman Jerome Powell has warned action to reduce inflation could be a temporary detriment to general economic growth and the labor market specifically. It is understandable then that some potential employers in Ohio are being patient and riding out the potential volatility of the next quarter or three.
Jumping in at the right time for them is better than jumping in at the right time to boost state agency numbers. And, in the end, small businesses that start out on the right foot will be better for Ohio, too.