The Philadelphia Fed provides the chart below detailing why businesses say they are not hiring. They are mostly concerned about low sales and wanting to keep costs down. This is what you would expect in a slow economy. Concerns about regulations are much lower. Concerns about health insurance costs are also much lower, especially as a most important factor. Given how variable they can be, we have seen increases of somewhere between 4% and 26% in premiums over the last ten years, this should be on the list in every survey. Of note is that this rates only a bit higher than concerns about labor costs being too high, in a market with excess labor.
Interestingly an additional, more subtle reason is that the software tells them not to.
H. M. Stuart
Alexandria
Krugmanwould have us believe that the present slowdown is the expected result of insufficient stimulus and too soon austerity. While I have a hard time accepting the idea of ever greater gov spending, it is hard to not see the accuracy of his prediction now that gov spending is significantly down.
No real surprises. Number 2 is a no-brainer. What firm doesn’t want to keep its operating costs low? “OK, guys. I called this meeting to see how we can raise operating costs.”
Regulations affect certain industries more than others. Financials, energy, and health are three easy examples. Many other industries have a much easier time in a regulatory sense.
Health insurance costs are a large concern at my company of about 200 full-time employees and even more part-timers (who I think don’t get health insurance). But, I doubt concerns about health insurance costs influence hiring decisions much, if any.
I see a lot of “Increasing work hours without hiring additional workers” and “Increasing productivity without hiring additional workers” going on in our company, which makes our job much more stressful.
DAD, I suspect that you know this but, when the near future is cloudy but demand requires additional work hours, some companies prefer paying overtime. The overtime is more expensive than straight time but does not add to the tails of pensions, health benefits, unemployment, etc. If demand continues strong, new hires become preferable. In the meantime, existing workers occasionally use the extra cash to pay down debt, save for possible emergencies, or buy a new TV set.
Except we’re all on salary, with very few exceptions (clerical workers and part-timers). We are an employee owned company and get a share of the profits after 5 years which does make up for the extra hours monetarily. But, I’m wondering if we’ll ever go back to “normal” now that management has seen what we can do at our present staffing levels.
But, I’m wondering if we’ll ever go back to “normal” now that management has seen what we can do at our present staffing levels.
I would think there would be a limit to how long a smaller staff can keep up the pace. At my last job there were lay-offs (I was one) and the staff managed okay, but the killer work-load did have an effect on productivity and especially morale. The main job of running shows didn’t suffer but other things did – like inventory and upkeep.
What is “there are no sources of restraint”?
LOL. Hadn’t really paid attention to that one. Why aren’t they hiring EVERYBODY?!
Yes. This one has never made sense to me.
Steve
There is nothing stopping them from hiring.
Steve