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Why Aren’t Employers Hiring?

The fragile U.S. economy has made gains in several areas, but jobs isn't one of them. The unemployment rate rose to 9.6 percent last month, with big political implications ahead of November elections.

Gene Muller, president of Flying Fish Brewery in Cherry Hill, N.J., hopes to expand his microbrewery and hire more people once he can find the right space.
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Above: Gene Muller, president of Flying Fish Brewery in Cherry Hill, N.J., hopes to expand his microbrewery and hire more people once he can find the right space.

So why aren't employers hiring, and what will it take for them to create jobs?

A Snapshot In New Jersey

On Chuck Eldridge's desk in the rear of his small sign company in Cherry Hill, N.J., sits a worn business card for a temporary help agency. He keeps it just in case he and his employees have more work than they can handle and he needs to bring in new workers.

So far, he hasn't come close to using it.

"I sometimes grab that and go, 'I almost need it, I almost need it.' But we end up not needing it," says Eldridge, who owns a Signarama franchise.

If the job market is ever to improve, employers will have to start feeling a lot more confident about where the economy is going. In towns such as Cherry Hill, a busy bedroom community across the Delaware River from Philadelphia, economic activity has picked up a good bit since the depths of the recession last year.

Help Not Wanted

But are businesses finally ready to hire? Not yet.

"I think we're all sitting back and waiting to see if people are interested in renting right now. And I don't see that," says Howard Needleman, who owns and manages more than 70 office buildings and shopping centers throughout southern New Jersey.

Needleman employs 20 people in his Cherry Hill office, and managed to get through the worst of the recession without laying anyone off. But he no longer does the kinds of big real estate deals he did a few years ago, so he no longer contracts out as much work. That means less employment for gardeners, lawyers, heating and air conditioning service persons and construction workers.

"Where I may have been spending $2 million or $3 million dollars a year in redoing spaces and upgrading buildings, I'm not doing that now," Needleman says. "So where one of my major contractors may have been employing 10 or 15 people and then he had subcontractors out there, that no longer exists."

Signs Of Hope

With few people hiring, the unemployment rate in Camden County, N.J., as a whole was 10.6 percent in June. But there are glimmers of hope: One of Cherry Hill's biggest employers, a major coffee company, is expanding, and a new hospital is being built.

At Flying Fish Brewery, business has picked up a lot over the past year after falling at the height of the recession. President Gene Muller wants to expand his brewery, and is looking for new space. In the meantime, he's added some temporary workers.

"There's a lot of good folks out there who've lost jobs. It's a pretty good pool of part-time folks," Muller says.

Still, he's not completely convinced that the economy has turned around, and he's anxious about health care costs, which have risen 26 percent this year. Washington isn't doing much to help, he says.

"My confidence is still a little shaky in that I want to see what's happening with the election," Muller says. "I think there's a lot of hand grenades and mud being thrown from side to side, and I think that's not solving the problems."

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