RSS
Why aren't businesses hiring?
One entrepreneur says the federal government — specifically, the Obama administration's policies — are to blame. But do the facts support his case?
If it's smarter not to hire new employees, job market growth is likely to remain slow.
If it's smarter not to hire new employees, job market growth is likely to remain slow.
Corbis
W

ith unemployment lingering just under 10 percent, the Obama administration is under increasing pressure to bring back jobs lost in the recession. But Michael P. Fleischer, president of a New Jersey communications-equipment company, writes in The Wall Street Journal that the federal government is one of the main forces discouraging employers from hiring. Taxes and other expenses, such as unemployment insurance and Medicare, put a "punishing price" on businesses for each job they create, he says, and every new hire just makes companies even more vulnerable to new regulations and tax increases. Is the government really discouraging businesses from putting people back to work?

No, taxes aren't the problem: Fleischer's math doesn't add up, says Alex Pareene in Salon. He says his employee, "Sally," costs him $74,000, but after both he and his worker pay taxes and other expenses, she only takes home $44,000. But $12,000 of the difference is in Sally's benefits, and much of the rest is taxes she—not he—pays. His surcharge bill only adds up to about $5,000. If that's going to sink his company, maybe he should "give it all up and live off the dole."
"Wall Street Journal: Taxes, unemployed people to blame for unemployment"

Congress is making it too expensive to put people to work: Something's wrong when the government's imposing a "33 percent surtax" on creating a new job, says John Hawkins at Right Wing News. Liberal politicians try to blame businesses for the rotten economy, but that is "like a tick condemning a dog for not providing him with enough blood."
"Everything you need to know about how liberals kill the economy in a single column"

Obama is actually easing this problem: Fleischer is right that "it is ludicrously expensive to add workers," says Derek Thompson at The Atlantic. But he's wrong to suggest the Obama administration is to blame. In fact, $3,700 of the $30,000 surcharge he describes "comes from Social Security taxes he would not have to pay under the new HIRE act." And two-thirds of the $30,000 goes to health insurance. And with a health plan that pushes workers off employer plans and onto insurance exchanges, the Obama administration is trying to help, not hurt, executives like Fleischer.
"Is it too expensive to add new workers?"

EDITORS' PICKS

THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER

Subscribe to the Week