Why They’re Not Hiring

It’s those Evil, Greedy Corporations.

That’s the simple explanation most of the talking heads have for the continuing high unemployment numbers.  Those Evil, Greedy Corporations horde their money and refuse to hire anyone.  When they do hire someone, they don’t pay them enough, don’t offer them enough benefits, don’t pay enough taxes, pollute the planet, steal candy from babies, kick puppies, and make obscene gestures at your auntie.  Evil, Greedy Corporations are offered up as cartoon villains, detestable and vile and without any redeeming value.

The trouble with cartoon villains is that they are fictional.

A much more genuine explanation can come from actually asking people who make the decisions to hire or not.  (Going to a first-hand source?  Shocking! How will we be able to have the Five-Minutes’ Hate?)  And the story they offer is not good for those who demand more government control and spending:

When you add it all up, it costs $74,000 to put $44,000 in Sally’s pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally’s job each year.

To offset tax increases and steepening rises in health-insurance premiums, my company needs sustainably higher profits and sales—something unlikely in this “summer of recovery.” We can’t pass the additional costs onto our customers, because the market is too tight and we’d lose sales. Only governments can raise prices repeatedly and pretend there will be no consequences.

And even if the economic outlook were more encouraging, increasing revenues is always uncertain and expensive. As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company’s vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment.

A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government’s message is unmistakable: Creating a new job carries a punishing price.

The flat truth is no one is going to hire new employees unless there is some reasonable promise that the additional cost of the employee will be recovered through increased profits resulting from the new employee’s work.  That’s not “greed”, it is bare survival in tough economic times.  And all the recent additions to per-employee costs aren’t alone.  There is a seemingly endless well of new possible costs coming, including new environmental regulations, the possibility of a massive new “carbon tax”, and “card check” that promises to raise labor costs even further with exactly zero (at best) increase in productivity. Vague gestures towards a few thousand dollars of tax credits to stimulate job growth don’t even begin to cover the risks.

On top of it all, if you happen to be an oil worker on the Gulf Coast, your job is politicallly verboten.  Sorry about that.  Or not.

Only a crazy person would be eager to start large-scale hiring in this political environment.  Yet many anti-corporation zealots profess themselves outraged that the Evil, Greedy Corporations won’t get with the business of economic recovery.

They just don’t realize that part of the explanation lies in the mirror.  The excesses of anti-corporation policy and rhetoric (which is the harbinger of future policy) is sand in the economic engine.  You can’t be anti-business and then expect business to bail out the economy by expanding and investing.

It doesn’t work that way.

  

Author: LOGAN PENZA

Share This Post On