Monday, October 24, 2011

What Does a US Worker Really Cost?

An enlightening discussion here.
Some thoughts--

Compensation remains slightly more than half of the GDP, but more and more of it is in the form on non-wage type payments for taxes, benefits, etc.  So workers are taking home less, even as they make about the same in total compensation relative to the size of the economy.

The non-wage expenses are making our workers more and more expensive vis-a-vis their foreign counterparts, with the resulting incentives that cause employers to move jobs out of the US.

These non-wage costs (and their government-regulated nature, think payroll taxes, Obamacare health insurance) also act as a brake on domestic hiring.  As long as employers face economic uncertainty (in the form of the possibility of increased or changed regulation) every time they hire an employee, they will hesitate.  If enough of them hesitate, you get stagnant employment numbers.  Sound familiar?

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