We are hearing a great deal about the minimum amount of job creation that is accruing during the current recession. Aside from the fact that employment is the last thing to respond in any recovery, there have been a number of pieces of legislation that dramatically raise the cost of employment for employers and discourage the use of labor, as opposed to capital, in production processes. These regulations make it more difficult to fire employees; make it more costly to provide benefits to employees; force employers to make special accommodations for employees; or make it more likely that an employer could ultimately be sued by an employee. What this means is that companies will find it in their interest, where possible, to economize on labor and use technology or machinery instead. Here is a partial list of the legislation that I refer to:
1. The Americans with Disabilities Act of 1990 forcing employers to make accommodations for employees with all kinds of disabilities including the handicapped, the hearing impaired, and the blind. It also makes it illegal for employers to refuse employment because of disability status or to ask any questions about a disability in the hiring process.
2. The Civil Rights Act of 1991, which defined discrimination in terms of statistical disparities.
3. The plant closing law of 1988, which requires employers to give 60 days notice to employees before closing a plant or before making large layoffs.
4. Most states also have large numbers of health insurance requirements mandating that employer provided health insurance cover all kinds of services from acupuncture to marriage counseling.
It should be noted that the first three were all passed in Republican administrations. I know, the devil made them do it.
