Tuesday, September 29, 2009

The Role of Private Enterprise in the Economy

At this time, many employers are hesitant about hiring new employees to work for them. In fact, some of them have even downsized or done mass layoffs to save on expenses.

But according to the latest Employment Cost Trends from the U.S. Bureau of Labor Statistics, businesses especially small ones should start hiring people to bolster the economy. But just the same, employers just do not reach into their pockets to pay for the salaries of the new employees.

The average cost per worker in government on an hourly basis is $39.66 while $29.31 in civilian industries. The base wage is $26.01 for the former while $20.42 for the latter.

However, these figures did not include the potential cost of universal health insurance that the US Congress is presently debating on. Otherwise, the above amounts could have been different.

State and local government not only pay higher hourly wages but they also pay a bigger slice on paid leave, retirement and health insurance. While most government payment go to defined benefit plans, private businesses have shifted from defined benefit to defined contribution retirement plans to save money.

In short, since civilian industries have lower expenses on wages and benefits, they should start hiring new employees to lessen the impact of the global financial crisis.

For employers who wish to hire more employees, employment lawyers must be consulted to know the effects of hiring. Business attorneys may also be consulted to know the impact of hiring more employees to their business.