Welcome to the 'Help Not Wanted' economy

Things are still really bad out there. Where I live in Illinois, the local paper has few advertisements for jobs. And around town, there are few "help wanted" signs (I saw one at the supermarket and another at a convenience store). Unemployment is beyond 15% with many having given up looking for work at all.

The reason is becoming more and more apparent as we try and recover from this very deep recession; business owners, not government bureaucrats, academics, or the president of the United States know that it is not the time to begin hiring.

Why? Jerry Bowyer of National Review has a chart showing, as he put it, "Worst. Hires. Rate. Ever."

Economic minds on the political left might reflexively counter that the blame should fall on the greedy businesspeople who are not hiring. But even if we concede that business owners are greedy (which we do not), was there ever a point, across the hundreds of months during which the hiring rate has been reported, when they weren'tspree following passage of the Bush-Cheney (or is it the other way around?) tax cuts of 2003? Did Obama make them greedy?

No, but Obama has made them scared. Everywhere I go I hear the same story. Business owners know the little details that academics and pundits don't, and they know what not to do. They know, for example, that payroll taxes are not only scheduled to rise, but already have risen. And they know all too well that government-mandated unemployment compensation is funded by employers through an unemployment-compensation payroll tax. As a result, they know not to hire.

As a business owner, your unemployment-compensation level rises as you are forced to cut your workforce. And when job-market conditions are strained, as they are now, each new employee you hire becomes a potentially larger cost center than he used to be for each hour worked. If you let him go, you will end up paying him anyway every time you cut a check to your remaining employees. My friend Art Laffer calls this a "wedge" between employee and employer. It's a job killer and a wealth killer.
greedy? Weren't they greedy when they went on a hiring

The president bad mouthed the economy to get the stim bill passed. He badmouthed it when he wanted cap and trade passed. He's still bad mouthing it, trying to frighten people into passing his health care reform.

On top of that, his policies are simply making it impossible for businesses to start hiring again. More than anything, business abhors uncertainty and with Obama, that's what we're getting.

Bowyer recommends we elect a new Congress in 2010 and a new president in 2012. One wonders if there will be much of an economy left to save by then.

Hat Tip: Ed Lasky

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