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Analysis
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from NewsLink, Vol. 8, No. 3- Spring 2004
After a long lag, the labor market brightened in March and April. According to the government's monthly employment survey, the U.S. economy added 337,000 jobs in March and another 288,000 in April. Yet, the unemployment rate has yet to come down significantly. Economists have been at a loss to explain why job growth has been up to this point so meager. Some economists have argued that the growth in Limited Liability Corporations is one reason why the unemployment rate hasn't moved downward. They say that workers who have left the workforce are now entrepreneurs setting up their own firms through LLCs. If this is true, then the job market is far brighter than portrayed in the conventional measures such as the payroll survey. Such individuals who start up firms aren't counted in the payroll survey. This may not be the case. LLCs in Massachusetts grew as the jobs and the economy boomed during the late 1990s. However, as unemployment shot up the increase in LLCs also increased. Changes in tax laws and subsequent restructurings may have more to do with the upshot in LLCs than entrepreneurial activity. The Commonwealth enabled LLC filings in 1996. In any event, following a national trend, LLCs and the benefits they confer, are on the upswing. Source: U.S. Bureau of Labor Statistics (BLS), Secretary of State, Commonwealth of Massachusetts.
Upated on 26-May-2004 16:45
