Why Won’t Businesses Hire?

Supposedly, it’s because the US business environment is unfriendly. Corporations want to place all the blame for our economic problems on the government. It is certainly true that the state has not been guiltless in this mess. But neither have business elites. Let us analyze the facts.

Contrary to popular belief, the United States still remains among the top ten countries in the world in terms of economic freedom, business friendliness, and competitiveness (sources include the Freedom of the World Index , the Index of Economic Freedom, the Ease of Doing Business Index, and the Global Competitiveness Report ; note that many of the countries that surpass us in these areas are what we would otherwise call “socialist” – they have higher wages, universal healthcare, more state intervention, and so on).

Yet companies are firing people, freezing wages, slashing benefits, and refusing to hire, citing the business climate as too unpredictable, unfriendly, and oppressive to facilitate investing in the economy. Really? If that is the case, how have companies managed to gather a total of $2 trillion in cash reserves, continue to pay their CEOs millions in bonuses, and consistently make profits throughout the recession (in some cases even breaking records)? By just about every measure, most businesses are clearly doing well.

The government has screwed a lot of things up, but it has little to do with business leaders deciding they want to pocket more money for themselves while pretending, despite all the evidence, that they can’t afford to do their part.