One of the biggest impediments to job growth is simple wage skimming. The big offenders are the mandated insurances: Workers’ Compensation and liability. Workers’ comp is nothing more than a shakedown that adds 20 percent to construction labor costs in New York! Liability insurance is overpriced and sometimes even redundant.
The worker, employer, and costumer all suffer from inordinate costs incurred by these required protection fees.
It starts with the customer and his budget, which quickly transfers to the employer and how much he can pay his employees. The hourly rate that can be sustained is calculated and the required fees and taxes are then subtracted, not added on. This makes for wage structures that have a built in imbalance. The imbalance is that third party getting a bigger cut than is warranted by the value of his input.
The end result of moving money out of locales and returning very little is a degradation of that community and its standard of living. As net wages fail to keep up with the costs of living, tax revenues drop off and governments are forced to scale down.
An even worse outcome is when the public sector refuses to acknowledge this increasing disparity and borrows money and raises taxes and fees to maintain the status quo. The downward spiral has started.
I do understand that insurance is good to have when it’s affordable. However, when insurers factor in absurd risk multipliers when calculating its price tag, knowing it’s mandated by law, it’s nothing more than a shake-down that is not only bad news for those directly affected, but our entire economy.