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Home Publications Blogs Beat the Press If Business Confidence Explained Lack of Hiring, Then Hours Per Worker Would Be Increasing

If Business Confidence Explained Lack of Hiring, Then Hours Per Worker Would Be Increasing

Wednesday, 21 July 2010 07:27

Business people always want more money. That is part of a being in business. (Has Goldman Sachs or General Electric ever said they want lower profits?) This means that their spokespeople can be counted on to complain about taxes, regulations, wages or anything else that costs them money. Sometimes what they say is not true.

This can be clearly seen with current complaints that fears about regulation and higher taxes are discouraging hiring. This claim can be easily tested. If firms are in a situation where they would be hiring except for these fears, then we should be seeing an increase in the average number of hours worked per worker. We are not seeing an increase in hours worked that is at all out of line with prior recoveries. In fact, in the June data, hours worked fell. 

Reporters should examine whether the claims of business people are plausible instead of just repeating them.

Comments (5)Add Comment
written by skeptonomist, July 21, 2010 8:37
Do the media run "dog bites man" stories every day? They do run "businessmen complain about taxes, regulation" stories.
Plausible Deniability
written by sam, July 21, 2010 10:12
Put that pistol back in the holster. Shooting from the hip is dangerous. Business people are liars because they like to keep earnings, profits; but data that is probably compromised by a severe structural change in the economy is adequate for your conclusion? Reboot.
written by izzatzo, July 21, 2010 1:52
That's exactly right Mr Who's Your Nanny, it has nothing to do with lack of demand and everything to do with slavery reparations as announced by Rush Limbaugh. Corporations won't hire because of a realistic belief that future profits will be siphoned off by stupid liberals to reimburse those harmed by slavery.

That's also why hours per worker are low. Anticipating coming socialism, corporations took a cue from Germany and decided to hire more workers for fewer hours to spread the wealth in zero sum fashion to demonstrate that capitalism and free markets are working fine, and if no reparations were expected, they'd hire even more part time workers with no benefits.
What about...
written by Doug B, July 21, 2010 3:15
Companies could be bringing in temps to work 20 hrs per week, claiming that they would add more "permanent" workers if they felt more confident. This would reduce the average hours per worker (note: per worker, not per person in the US), yes?
written by urban legend, July 23, 2010 1:48
This post seems to have no connection to the WaPo article referenced. I saw nothing of the bogus argument about fear of regulation or taxation, only about business optimism or pessimism about the future of demand. Are you saying optimism or pessimism about the future has nothing to do with demand or business decisions to meet that demand?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.