The current economic downturn is far from over. For the past 14 consecutive months, the unemployment rate has remained above 9.5 percent. The new claims for unemployment insurance rose to a higher-than-expected 459,000 last week.
While every American has been affected by the recession, young people have been hit the hardest. The teenage unemployment rate remains the highest at 26 percent. For African American youths, nearly half of those actively searching for jobs are unemployed. This does not include the many teenagers that are willing to work but have given up searching for jobs. The MarketWatch graph below shows that youth employment has fallen in the past decade:
Individuals who begin working as teenagers are put at a considerable advantage. Studies have shown that people who do not start working as teenagers will ultimately suffer from longer periods of unemployment and lower wages in the future. Since many teenagers are struggling to find an entry-level job to gain experience and skills, some have referred to them as the “lost generation.”
So why have employers been so reluctant to hire new workers? According to some top CEOs, the Obama administration policies will punish them if they create a new job. If government raises the cost of businesses by imposing steep taxes and regulations, many companies have no choice but to lay off workers to stay in business.
Last month, Former White House Chief of Staff Rahm Emanuel asked a CEO of a large company:
How come you guys aren’t hiring more?
The CEO responded by saying:
I know you’re paid to do the president’s bidding, but I’m paid to answer to shareholders and a board of directors and your health-care plan is costing me $1.5 billion, your tax increases another $1 billion, and regulation another half a billion. So I might have to lay off people rather than hire them.
In the Wall Street Journal, one of the co-founders of Home Depot, Ken Langone, tells President Obama to “stop bashing business.” He states:
If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it’s a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance
A recent poll showed that half of CEOs did not anticipate hiring any new employees in the next year. Businesses are uncertain whether or not they can afford to hire new employees with threats of massive change, like the cap and trade bill. With the largest tax hike in history in just 77 days, unemployment levels are expected to increase even further. To boost hiring, Congress should instead promote policies that cut taxes and regulations on job creators.