Hiring Rates and the Recession

Because of this article, I ran across a new statistic called the “hires rate”. It’s compiled by the Bureau of Labor Statistics and is defined as “number of hires during the month divided by the number of employees who worked during or received pay for the pay period that includes the 12th of the month.”


The hires rate is currently at the lowest level ever. So what? It means businesses are afraid. Businesses aren’t hiring. Why not? I suggest two primary reasons: fear of unknown but negative legislation, and already increased costs (taxes) related to hiring. Payroll taxes have risen and are expected to rise more. Unemployment insurance costs borne by businesses are high and go up as businesses hire and then have to lay off employees. So what do businesses do? They avoid the potential costs by not hiring and doing more with fewer employees. Oh well.

And before you blame the greedy employers, weren’t the employers also greedy when the hire rate was at higher levels? Corporations don't just become "greedy" when times are bad. Greed, or self-interest, or the profit motive, is what drives economic activity in good times and bad. You need to be very careful about using the convenient but questionable attack on those “evil” corporations. By the way, didn’t those greedy corporations make the computers you’re using?