How Obama Has Made It Harder for Companies to Hire

COMMENTARY Jobs and Labor

How Obama Has Made It Harder for Companies to Hire

Jun 10th, 2016 1 min read
Patrick Tyrrell

Research Coordinator

Patrick Tyrrell is a research coordinator in The Heritage Foundation’s Center for International Trade and Economics.

Government data released on Wednesday shows the number of private-sector job openings was at an all-time high in April. Companies, however, hired the fewest number of people on a seasonally adjusted basis in nine months. Why the disparity?

The JOLTS (Job Openings and Labor Turnover Survey) data the government released show there were 5,289,000 private-sector job openings in April—114,000 more than in March. The government report also shows that private-sector hires declined by 169,000 compared to March.

With private companies advertising so many job openings, why are they not filling them?

One thing to consider is that the government imposed cost of employing people has risen. Government has made it more complicated and expensive to hire new workers.

Rules like Obamacare, President Barack Obama’s new overtime rule, minimum wage requirements, and other per-employee costs make businesses less likely to take risks on new hires. Businesses are inclined to be more selective about who they hire when each new hire comes with new government headaches.

Rules like Obamacare, Obama’s new overtime rule, minimum wage requirements, and other per-employee costs make businesses less likely to take risks on new hires.

The governmental costs will be the same whether they find the perfect job candidate, or decide to fill a position quickly with a worker who may not pan out. With both types of workers carrying the same high surcharges—it makes sense for business owners to wait for the most qualified job applicant over the quick hire.

More cautious hiring is bad for jobs seekers because they have fewer opportunities. It is bad for employers whose businesses grow more slowly when they are short-staffed. And it is bad for everyone because the economy as a whole is less dynamic and is more likely to hit a recession.

Economic pitfalls from the government are the last thing anyone needs.

This piece originally appeared in The Daily Signal