American Elephants


Here’s Why There are No Jobs and No Recovery. by The Elephant's Child

Two stories:

Kennewick, Washington —  It took Bob Bertsch 25 years to build his construction business and just one day for it all to go away.  Mr. Bertsch’s Kennewick -based Ashley-Bertsch Group went on the auction block last Friday. By 4 p.m. they had sold off two dozen vehicles and trailers, tons of power tools and supplies, and even the gas-fired fireplace in the office.

Mr. Bertsch, 65, said he is down-sizing because the tax burden got too expensive to stay in business.  “I am tired of carrying all the tax load,” Bertsch said.  “I renew 13 licenses here every year just so I can spend money in this city.”  He makes no attempt to conceal his frustration with the costs government imposes on small businesses like his.  Government is killing small business.  We used to have 24 employees, now all those people are in the unemployment line. He told a friend at the auction that he is selling out because the government was taking more out of his business than he was.

Los Angeles, California — George Will tells this story:  In 1941, Carl Karcher was a 24-year-old truck driver for a bakery. He was delivering huge numbers of buns, so he scrounged up $326 to buy a hot dog cart across from a Goodyear plant, and then the war came. As did millions of defense industry workers. Southern California’s contribution to American cuisine was fast food, which eventually included hundreds of Carl’s Jr. restaurants.  Carl died in 2008, but CKE Restaurants survives. It would thrive, says CEO Andy Puzder, except for the government’s comprehensive campaign against job creation

CKE has more than 3,200 restaurants (Carl’s Jr. and Hardee’s) with some 70,000 jobs, 21,000 directly and 49,000 with franchises. CKE’s health care advisers said that ObamaCare would add between $7.3 million and $35.1 million to the company’s $12 million 2010 health care costs.  They guess $18 million — twice what CKE spent last year building new restaurants. ObamaCare means fewer restaurants, fewer jobs at about 25 jobs per restaurant., and about 3,5 times that much in the community.

That’s not all — government policies are raising fuel costs which affect everything from air conditioning to the cost of supplies, and the threat that the NLRB will impose something like “card check” in place of secret-ballot union elections.  CKE has stopped building restaurants in California because approvals and permits can take up to two years, compared to six weeks in Texas, and the cost to build is $100,000 more than in Texas — where CKE is planning to open 300 new restaurants.

CKE has 95 percent employee turnover in a year, not bad for this industry. Health-care benefits under their “mini-med” policies will be illegal  under ObamaCare. All sorts of employers will be looking for ways to reduce numbers of employees.  CKE is governed by 57 categories  of regulations.  The administration is quite certain that regulation has nothing to do with the dearth of jobs.  In their world, that’s just what government does — set the rules to control business and the people who engage in it. That’s why they were elected, isn’t it?  To tell employers how to operate their businesses so everything is fair and good.

These are not unusual stories. They are being repeated across America in multitudes of businesses, and have been for the last three years. When you have an administration where no one has ever worked in the private sector, let alone managed anything in the private sector, you have a lot of regulators who have no idea what the consequences of their regulations are.  A job is a cost to an employer.  When you make it cost more, there are fewer jobs.

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10 Comments so far
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So why were all the jobs being eliminated before Obama took office? Oh, yeah… You’re lying.

Comment by Ben Hoffman

McDonalds got a waiver from Obamacare. Now we can see why.

Comment by PrimulaDaisy/Zoe (@cactidoll)

[...] Here’s why there are no jobs and no recovery [...]

Pingback by Other Story Links 12/6/2011 | Rightlinks Blog – Greece: Setting the standard for Democrats everywhere

I get my numbers from the U.S. Department of Labor, Bureau of Labor statistics, Ben. Where do you get yours?

Comment by The Elephant's Child

” A job is a cost to an employer.”

Uh, no … it’s not. If it were, there would be no employers.

Your criticism of this Administration is (mostly) valid; but it’s unnerving to have the lack of private sector management experience pointed out by someone who not only ALSO has no private sector management experience, but who has such a poor grasp of economic truths so self-evident that they rival physical truths such as “what goes up must come down”. It suggests a detachment from reality that can only originate in congenital or genetic mental defect.

Comment by samsapeel1

What are you talking about? You make no sense. The aim of business is to make a profit for the shareholders and to grow the business. One of the larger costs of doing business is paying those employees and paying for their benefits.

You have not the slightest idea what my experience is. We are happy to have commenters disagree, but calling names and spraying insults will get you banished. We expect civility.

Comment by The Elephant's Child

“One of the larger costs of doing business is paying those employees and paying for their benefits.”

Then why do they do it?

Is food a cost to you?

If the answer is yes, then why do you eat it?

There’s a difference between HAVING a cost and BEING a cost. A very BIG difference.

Your failure to recognize this difference indicates a lack of experience in something; either business or the English language.

To you, the distinction makes no sense; and prompts you to ask what I am talking about.

It is what YOU have said which makes no sense.

If that’s insulting to you, then perhaps you should correct it.

Comment by samsapeel1

Sam, instead of simply telling us that there’s a difference between “having” a cost and “being” a cost, could you explain it?

If I run a hot dog stand, my understanding is that I have a number of costs: ingredients, my equipment, power/fuel, and employee wages and benefits. If I have to pay my employees more, I would think that means my costs are higher. So, either I raise my prices or I get lower profits, right?

Comment by David Navarre

I am a small business owner. My company has serviced industrial machinery for the last 20 years. For every dollar I pay an employee in hourly rate (current top rate is $25.00/hr, worth over $70,000 with overtime), I pay another dollar in worker’s compensation insurance, payroll taxes, health insurance (I pay 100% of a plan that matches my RN wife’s plan with the same carrier at a teaching hospital, cost to me over $1400/month for a family plan), and company IRA. So, before I earn a dime to pay for the company truck that they take home (no transportation cost to get to work), pay for vacation (my long term employees get 4 weeks vacation, 9 holidays, and sick time), pay for the shop, pay for the legal and accounting expenses, liability and auto insurance, and overhead (repairs on company trucks, tools, supplies, replacements for broken tools, or government mandated training days), I have to charge $50..00/hr. Add in the other costs, and I have to charge $75.00/hr for me to cover their expenses to me. I still haven’t made a dime. My pay comes from doing the same work they do, less overhead and taxes. In 20 years of business, I have averaged less in income than my top three employees.

The last couple of years due largely to the drop in business and increases in costs (taxes, fuel, insurance, and health insurance have increased by an average of 35%), in order to stay in business (I am ineligible for unemployment because I own the business but have to pay 7% of my earnings toward unemployment insurance), my pay has dropped to the lowest paid employee. My part time people make more than I do. Ultimately, I had to lay off three employees because I couldn’t earn enough through my billable hours to pay them.

So, when you complain about no jobs, start a business and learn what business owners go through, before you complain. Oh yeah, according to the government, thanks to my wife and I both working hard at two jobs, we are rich enough to have to pay the Alternative Minimum Tax.

Comment by thehickave

Thanks so much for telling us about your experience. I’m afraid that way too many people are educated by those who have no business experience at all, and no understanding of business — those who sneer at “capitalism” and think that “profit” is a dirty word. Things should be done cooperatively, they believe, and business (according to Obama yesterday) should understand that it’s their obligation to create jobs in this country “because it’s good for the country that made their business and their personal success possible.” Uh huh.

I grew up in a small, successful family business and learned so much at an early age from my father who was an outstanding manager. The unanticipated costs of daily life are bad enough, but overzealous and ignorant regulators can destroy a business.

Comment by The Elephant's Child




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