A Job Grows In America Only To Be Stiffled By Government

It has been tough to post lately due to vacation and hectic schedule.  Remember you can always follow me on Twitter at GOPRevolt.  I can sometimes quick post there in between stuff.  Anywho...  This is a good segway into today's topic.  How is a job created?  There have been some great posts and rants out there.  The general theme being that government doesn't create jobs and can't.  A job is created only when a business owner has more work to do than he/she can themselves.  This is very true, but that is not the whole picture.  I want to start with a lawn mowing biz.  The owner can mow five lawns per day.  Over the course of time through hard work, referrals, biz recognition, etc, demand goes up.  The biz owner is left to wonder...  "Can I mow seven laws per day?"  Yes?  No new job.  No?  That is the start of the job creation process.  I say process because the owner won't just hire someone to mow two lawns per day.  The owner has been mowing five.  The demand causes the owner to think "biz growth."  (Please note that the demand is a result of economic growth as well.  A better economy means more people willing to pay for lawn service.)  Does it make sense to hire someone part-time to mow two lawns per day?  Can more lawns be found to mow that will keep a new employee busy full-time?  What are the implications of having a part-time or full-time employee?  There is unemployment insurance, social security tax, medicare tax, additional liability insurance, workman's comp, etc...  What about OSHA?  The new employee will be working with potentially dangerous equipment.  What workplace safety regs are there?  Not to mention the biz owner's personal tax rate.  Will the biz growth cause a proportionately greater tax burden?  Factoring in all this red tape and expense now changes the dynamic of two laws per day on a part-time basis, and probably changes the dynamic of the full-time scenario.  How many laws must be mowed to keep the biz profitable with two full-time workers now?  Will the owner have to grow the biz to 11 laws per day (5.5 per worker) to make having a full-time employee worth while?  Perhaps 12?  Perhaps just getting someone part-time for those two laws per day makes more sense if the red tape and expense is less?  Maybe part-time requires three laws per day?  I don't claim to be any great biz wiz, but know from personal experience as a contract consultant that a safe guess of a full-time employee's true cost is about double their wage.  That is why a company will pay a head hunting firm $75+ per hour for a $85k salary position to be filled by a temp.  No headaches.  This is for larger companies, but even in a small biz you are probably looking at 125% to 150% or more of the employees wage as the true cost.  Just add in the taxes and fees and it is pretty easy to hit 125%.  The moral of the story here is twofold.  One, there must be economic growth. That means a larger private sector and smaller public sector.  Two, the current biz demand or biz growth potential dynamic must overcome all the red tape, expense, et al, of hiring a new employee.  Small biz is the incubator of employment growth, but the Obama Admin policies are the disease.

 

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