Friday, January 29, 2010

How to Fix the Jobs Problem

by Llewellyn H. Rockwell, Jr.

All this talk of unemployment is preposterous. Think of it. We live in a world with lots of imperfections, things that need to be done. It has always been so and always will be so. That means that there is work to be done, and therefore, always jobs. The problem of unemployment is a problem of disconnect between those who would work and those who would hire.

What is the disconnect? It comes down to affordability. Businesses right now can't afford to hire new workers. They keep letting them go. Therefore, unemployment is high, in the double-digits, approaching 17% or more. Among black men, it is 25%. Among youth, it is 30% or higher. And the problem is spreading and will continue to spread so long as there are barriers to deal-making between hirers and workers.

Again, it is not a lack of work to be done. It is too expensive to pay for the work to be done. So ask yourself, what are those things that prevent deals from being made?

Let me list a few barriers:

The high minimum wage that knocks out the first several rungs from the bottom of the ladder;

The high payroll tax that robs employees and employers of resources;

The laws that threaten firms with lawsuits should the employee be fired;

The laws that established myriad conditions for hiring beyond the market-based condition that matters: can he or she get the job done?;

The unemployment subsidy in the form of phony insurance that pays people not to work;
The high cost of business start-ups in the form of taxes and mandates;

The mandated benefits that employers are forced to cough up for every new employee under certain conditions;

The withholding tax that prevents employers and employees from making their own deals;

The age restrictions that treat everyone under the age of 16 as useless;
The social security and income taxes that together devour nearly half of contract income;

The labor union laws that permit thugs to loot a firm and keep out workers who would love a chance to offer their wares for less.

Read the rest of the article here.

1 comment:

  1. Excellent suggestion but impossible to implement within the current political system. Creating barriers to voluntary deal-making is exactly what politicians are incented to do.

    De-legitimize the system, stop voting.

    ReplyDelete