Archive for March 12th, 2004

Why aren’t companies hiring?

Mar 12, 2004 in Current Events

Despite the fact that the economy is finally crawling out of it’s doldrums and poised to make a comeback, job creation is still remarkably sluggish. The Decembrist examines this phenomena in a startling and thought-provoking post: The Economy Summed Up: Pay Any Price, Bear Any Burden, to Avoid Creating Jobs

Mark Schmitt quotes Charlie Cook, a political campaign analyst who offers this quote from a California tech CEO:

“There is no amount of overtime that we will not pay, there is no level of temporary services that we will not use, there is no level of outsourcing or offshoring that we will not do, in order to prevent us from having to hire one new, permanent worker in the U.S.”

And why is this, you might ask? The consensus, according to Mark and the commenters to this post, is skyrocketing health care costs. The cost of employee benefits has gotten so high that it’s cheaper to resort to temp agencies and mandatory overtime than to pay health care benefits for a new employee.

Sounds like we’re back to cracking an old chestnut that is more systemic in nature than tax breaks and productivity increases can fix.