Friday, October 2, 2009

Random Rants--A Friday Feature

I used to manage money for a large German re-insurance company. Frequently I discussed social and economic policy differences between Germany and the U.S. with my client. It was from him I learned about Germany's pesky, perennial, high single, low double-digit unemployment rate.

I know what your thinking: But, the Germans make great products. How is it their unemployment rate would remain high? According to my client and every other German business man I spoke to, the imposition of onerous social programs on the backs of small business, that's how.

Let's consider the average small business owner in the U.S. (If you really want to have fun, and before they go extinct, you may want to consider those in California trying to scrape out a living.) After hiring an employee and paying his salary, the employer must pay a social security tax, health care premiums (in part or in total), vacation and sick pay, provide a retirement plan option (tested for discrimination to ensure the evil business owner isn't stashing a greater percentage of his profits in his own retirement account). In California, add a tax for one of the most poorly run worker's comp funds in the country and a city tax on each employee if you are unfortunate enough to have based your business in San Francisco and pray your employees don't have any pre-existing conditions since you are required by California law to accommodate them. Whatever it takes.

With mandatory health care casting a shadow over employers like a mushroom cloud, should we be surprised (as apparently the "economist's polled" were) that they have not just stopped hiring but are still shedding jobs. I know I've cut my own household expenses by 20% and am still searching for places to cut further. Uncertainty has that effect on people.

So our unemployment rate has risen 0.1% to 9.8%. Big surprise. Another 263,000 jobs. Those Olympics in 2016 should help, huh? The TARP money being spent overseas should have some sort of trickle down, don't you think? Last July the unemployment rate was 6%. I know, I know, Obama inherited a poor economy. Yadda Yadda. It's a tough job being President. Presumably he knew that when he ran. Having run a small business myself I was a little worried when he replied to one question that it was above his pay grade.

Ronald Reagan understood when you get government off the backs of small business, when you clear the way for them to do what they do better than any other nation on the planet, they will innovate and grow and HIRE.

No comments:

Post a Comment