“The Controller Position sent out yesterday is on hold. The owner of the business has put everything on hold.”

This announcement is but one example of what is in many people’s e-mail inboxes today.  People are looking for jobs and jobs are evaporating before their eyes.  Why is this true?  It is because of uncertainty?  The tax credit of $5,000 offered by the administration shows a shallow understanding of this process.  The cost of an employee includes wage/salary, payroll taxes and fringe benefits such as life and health insurances, retirement contributions, vacation contributions and other perquisites employers traditionally include in their benefit programs.  These costs can add an additional 30% or more to the wage cost of that position.  Thus, an individual whose salary is $50,000 actually costs that employer something closer to $65,000, $70,000 or more depending upon that employers specific benefit plan.  A $5,000 tax credit to encourage an employer to hire in the face of the total cost to bring an individual on board is laughable when the employer has nothing for that person to do. 

Businesses are not going to invest in jobs without some level of certainty that they will be able to have something for those employees to do that will add or sustain profit to their organization.   When faced with an administration and a Congress intent on controlling their lives and redistributing their income in the form of new onerous taxes, businesses will wait.  The owner of the business announced a hold on hiring because that owner is uncertain about the future.  We are being presented a budget that will further destroy an economy that has already been deeply wounded by stimulus bills; threats of Cap and Trade; threats of higher taxes on small business owners; threats of higher costs for raw materials from businesses impacted by these same conditions; and threats of higher health insurance and other employment costs. 

Is it any wonder business are placing “everything on hold?”