by Jerry O’Driscoll
In today’s (Monday, August 9th) Wall Street Journal, a small business owner provides the calculations on why he is not hiring. He takes his median employee, changes her name, and explains why he must spend $74,000 to provide her with an after-tax salary of $44,000 plus $12,000 in benefits. The risks of higher taxes and mandates are on the upside. And, yes, Obamacare is already adding to his healthcare costs.
Sometimes commonsense economics trumps high theory. Firms aren’t hiring because it isn’t cost effective. The owner could hire more people and expand his business, but it isn’t cost effective.
What would you do to alter the calculation in favor of more employment?