2

Getting companies to hire

Todd Buchholz

Bob Moon: The latest job numbers are bringing some welcome news to the economy. The government's monthly report last week showed 216,000 workers were added to payrolls in March. And there's more positive news in the latest weekly report. The number of people filing for first-time jobless claims decreased again.

Still, millions of Americans can't find work. So commentator Todd Buchholz has an idea for creating more jobs.


Todd Buchholz: We all know we could use some hiring with a roughly 9 percent jobless rate. And that means encouraging more companies to hire workers. But there's a problem. Take a look at the health care legislation that just had its one-year anniversary. A firm with 50 or more employees must provide government-approved health insurance. Or it can pay a fine.

By the way, for businesses that already provide coverage, that fine looks enticing. Just $2,000 per worker. That's why some firms may end up choosing to voluntarily pay the penalty and dump their coverage and their workers onto the taxpayers. Accountants at AT&T told their bosses they could save nearly $1.8 billion by paying fines.

But for small and growing businesses, the rule of 50 looks like a stumbling block. And it's a big one -- currently, we have about six million companies with fewer than 50 employees.

Let's take a hypothetical case: say you have 48 employees. Would you hire two more and risk stumbling across the line that says "50?"

Better to hire the part-timer. In this recovery, about 25 percent of the new jobs have been temporary. That's compared with 10 percent after the 1991 recession. A recent government report showed the number of job openings actually falling, and five applicants wrestling over each job. No wonder millions of job seekers have given up.

What can President Obama do? Surely, the president doesn't like the high jobless rate. No one does. But he can take back the "rule of 50" stumbling block. How? By turning it into an incentive for businesses to go out and hire people. Young, growing businesses create the bulk of our new jobs. The president should say: "If you hire another employee, I will exempt you from my health care plan for another five years." That way the rule of 50 can inspire job creation rather than stifling it.


Moon: Todd Buchholz worked for the first President Bush. He's the author of the new book, "Rush: Why You Need and Love the Rat Race."

About the author

Todd G. Buchholz is an American economist and author. He is a former senior economic adviser at the White House, a managing director of the $15 billion Tiger hedge fund, and an award-winning economics teacher.
Log in to post2 Comments

I guess Mr. Buchholz didn't get the memo that we're in the worst economy since the Great Depression, and comparing job openings to openings in 1991 as "proof" of inadequacies in the Healthcare Legislation is like saying snow shovels are defective because they can't keep the sidewalk clear during a blizzard. But, logic and reasoning weren't the Bush Administration's strong suit after all...

The answer to fixing health care and getting more people covered so the rest of us don't have to pay their emergency room visits is not to put it off for another 5 years. Maybe extending the small business tax benefit portion of the health care law for covering employees is the real answer.

With Generous Support From...