The jobs problem
Llewellyn Rockwell, founder and president of the Ludwig von Mises Institute and LewRockwell.com , explains here why mandating increased benefits will raise the cost of employment, thereby lowering the number employed. An excerpt:
Here is the problem. Mandating benefits for employees imposes costs on employment. The would-be worker bears the cost. It makes the worker more expensive to hire. The employer has to pay not only a salary but also a benefit. If you make it more expensive to hire people, fewer people will be hired.
It is no different from eggs at the supermarket. If they are $2 each, you will purchase fewer of them — you will economize. This is nothing but the law of demand: consumers will demand less of a good at a higher price than of a good at a lower price. A salary plus benefits amounts to a price that the employer must pay to purchase the work of a laborer. At a higher price, less work will be purchased by the employer.
That means that requiring employers to provide health benefits to employees will make the present job situation worse, not better. It will intensify the current problem that people want to work more but are having a hard time getting employers to hire them.
Loading...
