Why Business isn’t Hiring–Real World Economics 101

(via Professor Bainbridge, via Glenn Reynolds

It really isn’t rocket science, you know:

The flat truth is no one is going to hire new employees unless there is some reasonable promise that the additional cost of the employee will be recovered through increased profits resulting from the new employee’s work.  That’s not “greed”, it is bare survival in tough economic times.  And all the recent additions to per-employee costs aren’t alone.  There is a seemingly endless well of new possible costs coming, including new environmental regulations, the possibility of a massive new “carbon tax”, and “card check” that promises to raise labor costs even further with exactly zero (at best) increase in productivity. Vague gestures towards a few thousand dollars of tax credits to stimulate job growth don’t even begin to cover the risks.

On top of it all, if you happen to be an oil worker on the Gulf Coast, your job is politicallly verboten.  Sorry about that.  Or not.

Only a crazy person would be eager to start large-scale hiring in this political environment.  Yet many anti-corporation zealots profess themselves outraged that the Evil, Greedy Corporations won’t get with the business of economic recovery.

They just don’t realize that part of the explanation lies in the mirror.  The excesses of anti-corporation policy and rhetoric (which is the harbinger of future policy) is sand in the economic engine.  You can’t be anti-business and then expect business to bail out the economy by expanding and investing.

It doesn’t work that way.

It DOES work this way–which of course is why it isn’t working…

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