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Old September 9th, 2011, 06:32 PM
Rev22:17 Rev22:17 is offline
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Join Date: May 2003
Location: Massachusetts
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Originally Posted by You View Post
I think the biggest hurdle to get over is to somehow give companies some kind of incentive to hire people. The more people working, spending dollars and the government collecting taxes would be a huge help. Now, how to do it....In the last few years health care has increased way too much, and I think that is one reason companies are hesitant to hire new workers.....
That's really a simple question of economics.

Fundamentally, we need to understand each a corporation exists for one reason and one reason only -- to generate profit for its shareholders. Thus, a corporation will hire a worker only if the managers expect that employing that worker will add profit to the corporation's bottom line.

Now, profit is the difference between the apportioned revenue generated by the worker and cost of employing the worker. The cost of employing the worker includes:

* Wages (Salary), Including Paid Time Off (Vacation, Sick Time, Personal Time, etc.),

* Apportioned Cost of Training,

* Cost of Insurance (Life, Disability, Medical, Dental, etc.) and Other Benefits,

* Apportioned Overhead Cost of Office or Other Workspace, Including Rest Rooms, Break Rooms, Meeting Rooms, Laboratories, and Other Shared Areas,

* Apportioned Cost of Utilities (Water, Sewage, Electricity, etc.),

* Apportioned Cost of Tools, Equipment (Including Computer Sytems and Software), and Company Vehicles, as applicable,

* Payroll Taxes (FICA, Medicare, Unemployment Insurance, etc.) Levied on the Employer, and

* Apportioned Cost of Administrative Expenses Incurred in Filing Government Reports, Processing Payrolls, Obtaining, Maintaining, and Documenting Certifications/Qualifiations and Training (Including Security Clearances for Government Contractors who Require Them), etc.

In many businesses, the total burden on the employer is now over twice the employee's salaries and wages due to the cost of regulatory mandates.

Government mandates that cost employers money tip the balance so that employment of workers who are marginally productive ceases to be profitable, so corporations respond by laying off the marginal employees. Additionally, many corporations have resorted to hiring a lot of part time employees rather than fewer full time employees to reduce the cost of benefits.

It's also important to remember that most companies require two to four years of visibility of profitability to hire permanent employees. Lacking this visibility, they will use overtime or, if necessary, contract for temporary help through an agency rather than hiring permanent staff.

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