Why Isn’t Business Hiring?

A businessman explains:

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 Dems have made it clear that there’s no fixing that absent a regime change.

15 thoughts on “Why Isn’t Business Hiring?”

  1. Even with a regime change the problem will continue even if relieved a bit. It is outrageous that ‘leaders’ in Washington are unable to read this article with comprehension.

  2. “i’m not sure what he’s whining about. If he’s that unhappy he can 1099 these people.”

    He probably can’t 1099 “these” people, i.e. his current employees. And there’s no guarantee he could get 1099 employees of the same quality.

    You get what you pay for.

  3. These details should be brought to town halls and to campaign stops, and every candidate should be grilled about this reality.

  4. Everyone’s paystub (or at least the yearly summary on the W2) should have a line “Total cost of my employment.”

  5. Good old jack, always pushing for the most inefficient government possible. Why not just get rid of all the foolish rules for deductions and exceptions, so that it is easier for business to worry about business and not about legal loopholes? Heck, maybe then, Democrat congressmen can figure out the laws they pass and follow them.

  6. I think what “Jack” is saying is that instead of employing a person and taking on the paperwork burden that entails, one can in effect dodge all of that paperwork by securing the needed services by instead of hiring people, simply having people as “independent contractors.”

    Hence the 1099 form. The recipient of the 1099 is not an employee — no benefits, no salary, no minimum wage, no overtime, no health care, no anything beyond the payment reported on the 1099 form.

    A couple things. Yes, the 1099 form is the “cynical, heartless dodge” of taking on the responsibility of being an employer rather than a payer of contracts. On one hand, making proper employment-with-benefits even more trouble tips the balance towards this practice.

    The second thing is that there are IRS rules regarding who is a contractor receiving the 1099 form and who is an employee receiving the W-2 statement of wages and tax withholding. If one is a cynical and heartless but yet lawful would-be employer, it is not that simple as substituting one form for the other, however common this practice may be in , say, computer software development.

    Hence, many small businesses do without employees — I have seen this first hand — and hence unemployment.

  7. “The recipient of the 1099 is not an employee — no benefits, no salary, no minimum wage, no overtime, no health care, no anything beyond the payment reported on the 1099 form.”

    Which is why one can’t attract the best people under that scheme…at least for very long.

  8. I guess that jack doesn’t remember that the right-wing nut troubled progressive who crashed his light plane into a government office a couple years back was complaining about how the IRS treated him wrt 1099s…

  9. Drive up the cost of labor through taxes, increases in regulation, and higher health care costs. Throw in a lot of uncertainty about what the future holds in a weak economy. Surprise, employers aren’t hiring. Who would’ve thunk it?

    I wish all employers provided this info to their employees. Likewise, I wish companies added a line to their receipts detailing the portion of the bill that was due to the cost of government regulation and taxes. Recently, a coworker returned from a trip to San Francisco. He said he got a receipt at one place that stated there was a surcharge (3 or 4%) to cover the cost of city employee health coverage. Government levies these charges on business and expects us to not know why prices go up. We blame “greedy businessmen” for the price increases when they’re often not the reason.

  10. “Which is why one can’t attract the best people under that scheme…at least for very long.”

    There may be abuses of the system and breaking of the law, but my understanding is that the IRS has some specific rules and regulations on this, so an employer cannot “1099” just anyone. Thus, even if you were not worried about keeping the “employee/contractor” happy, there are restrictive circumstances under which you can go the 1099 route.

  11. Or the reason he’s not hiring is that his company is not profitable. In 2002, his company (Bogen Communications) made $2 million on sales of $59.1 million. It’s trended down just about every year since then, ending 2009 at an $11.6 million loss on sales of $44.8 million. With those numbers, I’m not sure they can afford to buy paperclips, let alone hire people. (Source: Bogen’s reported financial statements on the company’s website)

    Remember – all of those figures are under the previous administration’s taxation and health care schemes.

  12. Chris, you’re conviently ignoring the gist of his post – that government taxes and mandates add 1/3rd to the cost of employing someone. Make labor more expensive and surprise, companies will use less of it.

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