Congress Should Keep Their Sticky Fingers Out of Jobs

I know, it sounds harsh. But the reality is anything that Congress touches that it is not equipped for ends up worse than before. “Solving unemployment” is definitely something which Congress (and the rest of the federal government) is not equipped to do. Yet they are trying to do just that with the recent $13 billion HIRE bill that passed the House last week 217-201.

Yes, the unemployment rate is at 9.7%. (And really, the number is much worse considering that the “official” number only measures those who are seeking unemployment benefits and not those whose benefits have either run out or aren’t taking them.) Yes, people need jobs. But is this something that Congress or the federal government should handle? No.

“We feel the American people need a message,” Majority Leader Harry Reid (D-Nevada) told the New York Times about the Senate version in February. “The message that they need is that we’re doing something about jobs.”

Yes, Mr. Reid, you are doing something. However, that something is worthless. It is nothing more than petty politicking in preparation for the November elections.

Want to know why this bill will not work? Let’s think about it for a minute. The main feature of this bill is that employers will be exempt from their share of social security (a 6.2% payroll tax) for each new hire that has been in the unemployment line for at least 60 days and will receive a $1000 tax credit after that new hire has been employed a year. This isn’t worth anything to any employer who has at least something besides a vacuum between their ears.

There are two inherent problems with those two incentives. First, payroll tax is already deductible. Second, employers can receive that credit if their new employee was hired as a replacement for one who quit or was fired. See where this is going? Not only will this likely be zero-sum (fire one, hire another), but this will also mean that bad employees can almost count on working 53 weeks instead of 51 before being fired. These bad employees will likely cost a business more than the “incentives” can offset.