As some of you may know I am a small businessman. I am in the process of taking a minority position in a 2nd small business with about 25 employees. Small businesses of this size are typically the engine of job growth in the US economy. Yesterday I and my partners hired 2 new employees for our shop out back.

This begs the question. Why were these two men hired? Tax incentives? Stimulus spending? Government policies of some type?

The answer is something far far more simple then that. For 3 weeks now our shop manager has been coming to me trying to convince me that the shop was overloaded with work and he needed new people. So I started paying closer attention to order backlogs, new business coming in the door, overtime pay in the shop etc.

The shop manager was right. It was time for new hires. Business demand mandated that we hire.

So that is the answer. Without demand these new folks would not have been hired. So the key to job growth is business demand which typically comes from decent economic growth.

So if the economy grows at a decent clip we get sustained employment growth.  I don’t think that the US economy has been growing enough for sustained job growth.  I think our little business has been seeing some growth due to some unique factors specific to our situation.