High Unemployment - Government Ineptitutde

Assuming that the government thinks it need to do things to address high unemployment, reason and rationality would suggest that the government should encourage employers and potential employers to hire people.

Seems pretty obvious. So simple, even government should think of it.

But how can government do that? For starters, why not stop punishing employers for employing people. When an employer hire someone, the employer steps into a complex morass of higher taxes and arcane regulations. The new employer can't simply write a check to the new hire. They have to pay premiums for various programs (unemployment, workers compensation). They have to withhold a variety of taxes, federal state and local. Scarier, they have personal liability on all these taxes, despite corporate entities as the employers.

On top of all that, employers have to have sophisticate lawyers and human resources people to navigate through anti-discrimination laws, retirement plans and medical plans. The anti-discrimination laws are not mere common sense. You can't ask an applicant if they are married, for example. You can't ask an applicant if they are black, unless it is for the purpose of providing a preference, but you must ask if the are black after hire, so you can be prepared to report to some oversight agency in the event of a problem.

Anti-discrimination laws frighten small employers into not hiring minorities. If they hire minorities, the small employer may be face with huge lawyers fees if they ever have to lay off or fire the minority if they have to defend themselves from the discrimination claim. These claims are encouraged, because the claimant has nothing to lose. It costs them no legal fees to make a claim lacking merit. Ohio like other states does not exempt employers based upon small size.

What is the reword for employers to take these risks and to bear the government burdens? employer hope to make a profit. so the employer must take on the certainty of government burdens on the hope and prayer of a profit.

The answer: government needs to recognize and lessen the burdens on employers. Encourage employers to take the business risks.

Counter-intuitively perhaps, state governments can encourage minority employment by adopting exemptions in their civil rights laws for small employers, as the Equal Employment Opportunity Act does. In my observation, small employers want to do the right thing. Small employers want to provide opportunities to qualified minorities. Take away the burdens, and more minorities will find employment with small employers.

But don't hold your breath. Every new government idea seems to impose a new mandate on employers, as if employer resources were limitless.

The bottom line is that once again, government is more of the problem and refuses to become part of the solution. Rather than low cost solution, expect government to throw more money at the problem without any real understanding of employer incentives.


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