Why a Jobs Summit? | Richard W. Rahn | Cato Institute: Commentary

Why a Jobs Summit? | Richard W. Rahn | Cato Institute: Commentary: "First the basics: Employers will hire more workers of any given experience and skill level when the cost of hiring them is lower rather than higher. More people are willing and able to work when their take-home pay is higher rather than lower."

"A major reason we have unemployment is that the government taxes both employers and employees, thus driving a "tax wedge" between what it costs the employer to hire someone and what the employee actually receives. The employer must pay payroll taxes, unemployment taxes, and other taxes for each worker he or she hires — thus reducing the demand for labor. The employee must pay payroll taxes and income taxes, thus reducing the supply of labor."

"These tax increases have two effects. The first is that business owners will have less money to pay their existing workers, let alone hire new ones; and second, these tax increases reduce their incentives to remain in or expand their businesses."

"Rescind the minimum wage increase that went into effect this past summer. This was equivalent to a 100 percent tax on the least experienced and least skilled workers. Employers predictably laid off many minimum-wage workers after the increase. It is both unfair and cruel not to let low-productivity workers get their first jobs where they can learn how to become high-productivity workers."