8/10/2010

Why Businesses Aren't Hiring

Many in Washington are wondering why more businesses aren't hiring. Anyone in business could give all kinds for reasons, many of them emanating from those self-same folks in Washington. With all kinds of new regulations, taxes, and other burdens coming why should anyone in business, large or small, want to hire when there are far too many unknowns? The answer: they wouldn't.

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.

And what happens when the provisions of ObamaCare kick in and adds thousands more to the cost of hiring a new employee? The probability of hiring that new employee goes down.

More than one commenter to the op-ed piece linked above made it quite clear they had absolutely no understanding of business and why businesses hire new employees. To them all that was needed was for the business to hire new employees and the economy would start its recovery. They didn't understand that businesses won't hire them until they are needed. To do otherwise places a burden on those businesses with little or no prospect of generating any more income for that business and quite possibly turning a marginally surviving business into a money losing business. Businesses hire only the amount of employees they need to provide the goods or services their customers require. But these economic morons either can't or won't understand this simple concept.

My wife and I own a small business. (We both have other jobs.) While it is surviving it is barely viable. The economic downturn saw our income for the business shrink by almost 70%. My wife stopped taking a salary a year ago in order to ensure the business would survive. Both of us put in countless hours without pay in order to make sure we can pay our bills, our taxes, and meet our payroll. If the economy recovers we expect our customers to return as well (though not necessarily to the pre-recession level). But until then there's no way we could even consider adding another employee because if we did we wouldn't take in enough to pay them and pay all our bills, taxes, and business loan. In a short period of time we would be out of business and 5 employees would be unemployed. Yet this is exactly what the aforementioned economic/business morons want us to do.

Need I say more?