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Why I'm Not Hiring....

Discussion in 'Politics, Elections & Legislation' started by Brian in Oregon, Aug 10, 2010.

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  1. Brian in Oregon

    Brian in Oregon Well-Known Member

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    Liberals just don't seem to understand, or just don't care, that raising taxes in a bad economy is NOT going to create the badly needed new hiring, other than spending billions on public works projects to hire a relatively small percentage of the unemployed.

    Why I'm Not Hiring

    Why I'm Not Hiring

    When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits.

    by MICHAEL P. FLEISCHER<br>
    August 9, 2010

    With unemployment just under 10% and companies sitting on their cash, you would think that sooner or later job growth would take off. I think it's going to be later—much later. Here's why.

    Meet Sally (not her real name; details changed to preserve privacy). Sally is a terrific employee, and she happens to be the median person in terms of base pay among the 83 people at my little company in New Jersey, where we provide audio systems for use in educational, commercial and industrial settings. She's been with us for over 15 years. She's a high school graduate with some specialized training. She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

    Daniel Henninger discusses how Robert Rubin and Alan Greenspan agree that Americans should send more of their paychecks to Washington. Also, Fannie and Freddie ask for more cash within weeks of an Obama pledge to end taxpayer rescues.
    .Before that money hits her bank, it is reduced by the $2,376 she pays as her share of the medical and dental insurance that my company provides. And then the government takes its due. She pays $126 for state unemployment insurance, $149 for disability insurance and $856 for Medicare. That's the small stuff. New Jersey takes $1,893 in income taxes. The federal government gets $3,661 for Social Security and another $6,250 for income tax withholding. The roughly $13,000 taken from her by various government entities means that some 22% of her gross pay goes to Washington or Trenton. She's lucky she doesn't live in New York City, where the toll would be even higher.

    More
    Some Firms Struggle to Hire Despite High Unemployment
    Faces—and Fates—of the Jobless
    .Employing Sally costs plenty too. My company has to write checks for $74,000 so Sally can receive her nominal $59,000 in base pay. Health insurance is a big, added cost: While Sally pays nearly $2,400 for coverage, my company pays the rest—$9,561 for employee/spouse medical and dental. We also provide company-paid life and other insurance premiums amounting to $153. Altogether, company-paid benefits add $9,714 to the cost of employing Sally.

    Then the federal and state governments want a little something extra. They take $56 for federal unemployment coverage, $149 for disability insurance, $300 for workers' comp and $505 for state unemployment insurance. Finally, the feds make me pay $856 for Sally's Medicare and $3,661 for her Social Security.

    When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally's job each year.

    Because my company has been conscripted by the government and forced to serve as a tax collector, we have lost control of a big chunk of our cost structure. Tax increases, whether cloaked as changes in unemployment or disability insurance, Medicare increases or in any other form can dramatically alter our financial situation. With government spending and deficits growing as fast as they have been, you know that more tax increases are coming—for my company, and even for Sally too.

    Companies have also been pressed into serving as providers of health insurance. In a saner world, health insurance would be something that individuals buy for themselves and their families, just as they do with auto insurance. Now, adding to the insanity, there is ObamaCare.

    Every year, we negotiate a renewal to our health coverage. This year, our provider demanded a 28% increase in premiums—for a lesser plan. This is in part a tax increase that the federal government has co-opted insurance providers to collect. We had never faced an increase anywhere near this large; in each of the last two years, the increase was under 10%.

    To offset tax increases and steepening rises in health-insurance premiums, my company needs sustainably higher profits and sales—something unlikely in this "summer of recovery." We can't pass the additional costs onto our customers, because the market is too tight and we'd lose sales. Only governments can raise prices repeatedly and pretend there will be no consequences.

    And even if the economic outlook were more encouraging, increasing revenues is always uncertain and expensive. As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment.

    A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price.

    Mr. Fleischer is president of Bogen Communications Inc. in Ramsey, N.J.
     
  2. recurvyarcher

    recurvyarcher Well-Known Member

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    Very true. Our company just re-negotiated our health insurance, and we had to leave an insurance company that treated us really well because the increase was so steep. Things are going downhill quickly.
     
  3. hrosik123

    hrosik123 Member

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    Brian, the biggest killer is health care cost. Insurance companies have the most bargaining power but don't pass the savings to the consumer. If I didn't have insurance and had an appendix removed I would have to cover the entire $15,000. With insurance I pay my deductable and the insurance company pays $1,500. If it cost them less then why aren't we seeing any of the savings. Health care costs have skyrocketed and it cost employers more and more to get less and less. The new health care bill may not be the best but you have to start somewhere. Good luck Chuck Hrosik
     
  4. Bob Hawkes

    Bob Hawkes Well-Known Member

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    Chuck, I've been a small businessman for over 40 years. Healthcare we could deal with little by little, and now we as employers know a huge jump is coming at us from Uncle multifacited. We can not continue down this road. The Government and Unions have pushed us to the end. I believe we are the last generation to be able to live better than the previous. GOD, please help America.
     
  5. Brian in Oregon

    Brian in Oregon Well-Known Member

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    Chuck, please show factual data showing how an insurance company only pays a hospital $1500 for a $15,000 surgury. I'm curious where this info comes from that they pay hospitals and doctors ten cents on the dollar.
     
  6. hrosik123

    hrosik123 Member

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    Bob, I don't think that unions are to blame. Are they part of the problem, most certainly. What most don't understand is that not only do unions give the non-union work a better wage, they afford someone who didn't graduate magna cun laude a chance to earn a good wage. Without unions business owners would have a strangle hold over wages. Not good. Good luck Chuck Hrosik
     
  7. bigdogtx

    bigdogtx Well-Known Member

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    Chuck,,,,where are you located where an appendix removal is even billed at $15,000,,,,why don't you breakdown the costs,,,,much of the costs are DUE to the government,,,,one of the 3 biggest lies is, "I am from the government and I am here to help"....
     
  8. hrosik123

    hrosik123 Member

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    Bigdog, first of all I have to ask how your son is doing? Secondly I live in New Jersey where everything is exspensive. My daughter just had her her appendix removed and the billed cost was $13,967.32 I have the bill right here. Our deductible was a $900.00 co pay and the insurance company paid less than 3200 and the bill was paid. How is that right? For the past 30 years spending has been getting out of control and I don't see an end to it. 10 years ago my E>R> visit cost me $20.00, now it's $100.00 Big increase. Needs to be brought under control. Good luck Chuck Hrosik
     
  9. KRE

    KRE TS Member

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    I retired last Dec. and was ask by the largest cell phone carrier to start my own company doing for them what I had been doing for them the last 10 years. I looked at everything from all sides and concluded it's not worth it. By the time I start out with 20 people at approx 60-80K a year each(before bennies) bought 15 new trucks an other support items, I would have to go in debt about 2.5 - 3.0 mil.

    I would not see a return per my CPA that I could live with for 2.8 years with the tax laws today, so I'll just stay retired. I hate it, but I'm not working to support washington any more. All they want to do is reach into my wallet for something they had no hand in creating in the first place. This nation is in deeper trouble than most know. I hate the fact our children and grand children are going to pay for the welfare state we are leaving because of the liers an cheats in washington. Both parties hold blame in this, but the main blame is with the voters. Most of who always voted their wallet, instead of doing whats right for the country and it's folks.

    Kenneth
     
  10. Bob Hawkes

    Bob Hawkes Well-Known Member

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    Kenneth, It's a shame but you are correct. The government and the unions have become too large a burden for small business's to operate. Automatic raises every 6 month's year after year are not sustainable. It's the public sector unions here in the Northeast that have all of the towns and cities in the red.

    I am not a union basher Chuck, but you have no idea what we have to deal with in todays marketplace. It can't continue.

    Respectfully, Bob
     
  11. KRE

    KRE TS Member

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    Brian in Oregon

    Ref, health care.

    The same thing happens in Alabama with BC/BS. My wife pays the bills but I look at them all. On a 2.5 day hospital stay for her, the total hospital bill was 21.81K but they excepted 1873.40 from BC/BS as total payment. When I started looking into it, I found BC/BS pays hospital's a monthly fixed patient fee even if there are none in the beds. For that monthly payment, said hospital has to except the, agreed to service fee, prior to being a BC/BS approved hospital. I have tried to find out that dollar amount, per patient/month but have had no luck to date.

    Kenneth
     
  12. smsnyder

    smsnyder Well-Known Member

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    Health insurance,unions Taxes, destroy business in this country. To many other people from other countries willing to work for less. Many big companies moving out of the US.
     
  13. smsnyder

    smsnyder Well-Known Member

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    June imports up 3 percent. Exports done 2 percent. Wonder why there is no jobs?
     
  14. halfmile

    halfmile Well-Known Member

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    Bogen Communications is an old company, and when I was in business I bought their products, used them for over 40 years. I have equipment put in in 1978 that has never had a service call and has never been turned off.

    They are not dependent on new construction, as much communication equipment is renewed more than once in thelife of a building.


    This administration has put arrows into the heart of so much free market business it will take a concerted effort to repair the damage. The sad part is they have nothing to replace what they are destroying.

    Buy powder and bullets.

    HM
     
  15. SeldomShoots

    SeldomShoots Active Member

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    Chuck Hrosik and Kenneth KRE, I like your common sense approach to this issue and I think both of you are more right than wrong on what you speak of. I would like to buy both of you a beer, if we ever cross paths.

    John E.

    P.S. smsnyder, the reason there are no jobs is largely due to NAFTA and corporate greed. I haven't seen the price of Made in China goods go down proportionally to the labor savings that American companies arehey are purportedly recognizing. Its just that higher profits are going in the CEO's and shareholder's pockets. But that can't last forever, because no jobs = no money = no sale of products. Its just going to take some more time for it to sink in.
     
  16. stokinpls

    stokinpls Well-Known Member

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    There's nothing to worry about.
     
  17. Herb Roach

    Herb Roach Member

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    I know you people are talking about what the government takes away from you and the amount it costs to hire an employee, but there is something else that in a sense goes along with you problems. This government and several before it are responsible for our decrease in manufacturing capability. We don't have many industries left in this country. Can we build ships? Not very many. Can we build tanks? How long would it take GM, Ford and Chrysler to tool up for war? How many miles of railroad have been completely destroyed? How much scrap iron and steel is used in the US? If we are attacked again like we were nearly 70 years ago, how could we respond. This entire problem has been created because of the taxes which the government has put on the manufacturing sector. Can we move armies across our nation in semi trailers? I see some pieces of military on commercial low-bows, but our ability to fight another war right now is practically non-existant, and as far as I'm concerned, it's all the fault of Big Government. Herb Roach
     
  18. Brian in Oregon

    Brian in Oregon Well-Known Member

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    Kenneth, quote: <i>"The same thing happens in Alabama with BC/BS. My wife pays the bills but I look at them all. On a 2.5 day hospital stay for her, the total hospital bill was 21.81K but they excepted 1873.40 from BC/BS as total payment. When I started looking into it, I found BC/BS pays hospital's a monthly fixed patient fee even if there are none in the beds. For that monthly payment, said hospital has to except the, agreed to service fee, prior to being a BC/BS approved hospital. I have tried to find out that dollar amount, per patient/month but have had no luck to date."</i>

    This is the "managed care" version of payments. It is incorrect to say that the insurance company is only paying 10% on the bill, because the pre-paid managed care payments have to be added in. The total amount of the managed care payments have to be divided by the number of patients and then be calculated to offset the bill. Chuck is failing to take this into consideration.
     
  19. hrosik123

    hrosik123 Member

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    Brian, I'm not an insurance expert so I really don't know all of the inner workings of the industry. I do know that my cost for insurance has risen for diminished coverage. If you don't have insurance one illness can bankrupt a family. Insured people do pay considerably less than those without it. They are a contributing factor in why its hard to hire someone. I'm sure if costs were lower more jobs could be created. I can say that the amount the company was billed was a lot less than what they paid. There has to be a solution. Good luck Chuck Hrosik
     
  20. Brian in Oregon

    Brian in Oregon Well-Known Member

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    With managed health care, bills do come out differently.

    I had a bill from my doctor's office for several hundred dollars. On my followup appointment, I asked him what that was about, since the procedure far exceeded my deductible, and it had been approved by the insurance company. He explained it as I did above. That he could not charge the insurance company more, and that in the fine print that was not an amount I had to pay. His office ate the difference between my deductible and the actual cost, because the insurance company was paying him a fixed amount in advance for my care.
     
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