Why Any Recovery Will Be Jobless

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I recently
read the
summary of a panel presentation of leading employment attorneys
which made clear to me why an economic recovery, assuming we have
one, will be a jobless one.

Why would an
employer want to hire when he must incur all of the following:

  • Pressures
    to hire on factors other than merit: gender, race, sexual orientation,
    older workers. And now, efforts are accelerating to pass laws
    that would prohibit an employer from not hiring someone just because
    he committed a felony.
    if an employer’s intent is non-discriminatory, if a decision to
    hire, promote, or terminate employees has “disparate impact,”
    on one gender, racial group, or workers over 40, that may be grounds
    for a discrimination lawsuit against the employer.
  • Large and
    complicated payroll costs beyond salary: Social Security, Medicare,
    Medicaid, Workers Compensation, Unemployment Insurance (up to
    79 weeks), plus various state and local levies.
  • Mandated
    leave: 12 weeks per year with rights of rehiring (the Family
    and Medical Leave Act
    ) which may be expanded by the ‘”Healthy
    Families Act
    ,” which would mandate up to 56 hours of paid
    sick leave to take care of themselves or a family member very
    loosely defined: “anyone closely associated with an employee.”
  • The Americans
    with Disabilities Act, in addition to adding pressure on employers
    to hire people with physical and mental disabilities, requires
    employers to provide “reasonable accommodations” for all such
  • Laws granting
    plaintiffs lower burdens of proof regarding discrimination
    as well as sexual
    For example, an employer can be held liable for
    an employee’s being harassed, even if the employer is unaware
    that the harassment occurred. The financial and human costs of
    defending such lawsuits are enormous.
  • The
    proposed health care legislation will force employers to pay

    for the ever-escalating health care costs.

  • New
    makes it easier for workers to organize into unions,
    which, of course, increases employer costs while making it often
    prohibitively difficult to fire even low-performing employees.

If you ran
a business, wouldn’t all those mandates make you want to hire as
few people as absolutely possible – even if the taxpayers gave
you $5,000 per? That certainly wouldn’t seduce me — I’d rather stay
small than endure all those burdens and increased risk of having
to close down my business.

To the extent
I’d have to hire, I’d feel forced to use independent contractors
on a just-in-time basis, and would outsource/offshore as much as
possible. I might, for example, find such workers using websites
such as odesk.com, elance.com,
guru.com, virtualemployee.com,
ifreelance.com, and these
that Tim Ferriss,
author of The
Four-Hour Workweek
recommended when I
interviewed him on my radio show
yesterday: www.99designs.com,
www.crowdspring.com, www.asksunday.com,
and www.hiremymom.com

I believe that
President Obama and the Democrats are truly trying to help employees
but the inadvertent effect of their initiatives will ironically
be to eliminate jobs not create them.

4, 2010

Nemko [send him mail] is
contributing editor at U.S.
News & World Report
and columnist at Kiplinger.com.
500+ of his published articles are archived free on MartyNemko.com.

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