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How Much Does it Actually Cost to Add a Job?
January 31, 2011 09:51 AM
WOULD YOU LIKE FIRES WITH THAT?
ABC News Radio reports:
"There is a cacophony of voices shouting about jobs -- politicians, traders, economists, business leaders all yammering on about needing more and what it'll take to get unemployment down. With all the rhetoric, not many Americans know what it takes to fund a new job. What does it really cost to add a worker to a company's payroll?"
Here are the numbers they came up with:
$40,630.20 (BASIC WAGE; the average weekly earnings for a private sector worker according to the Bureau of Labor Statistics is $781.35 x 52 weeks)
+ $17,064.68 (BENEFIT and TAX COST; the BLS says that for every $1 in wages, employer costs for taxes and benefits are $0.42 )
= $57,967.88 (TOTAL ANNUAL DIRECT COSTS to employers for the average worker)
However, they ask, "what does it cost to add enough new jobs to cut the unemployment rate to six percent, where we were in the middle of 2008?"
ABC explains that, "Today we have 14.5 million unemployed folks in the U.S. To get to six-percent unemployment, we'd have to find work for 5.3 million of those unemployed people."
5,300,000 (NEW JOBS needed to bring unemployment to 6 percent)
x $57,967.88 (TOTAL ANNUAL DIRECT COSTS per new worker)
= $307.2 billion (ANNUAL COST OF NEW WORKER PAYROLL)
To absorb just the average direct costs of these new workers, according to ABC's data, "we would have to add 2.1 percent to the U.S. gross domestic product."
Anyone? Anyone? Bueller?
No positions in stocks mentioned.
HOW MUCH DOES IT COST TO ADD A JOB?
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