Boss Bob’s big problem

No doubt someone, somewhere, in the midst of our economic woes, has offered a magnificent bargain: A $350 thousand Lamborghini Murcielago for a mere quarter-million, a “castle in the hills” at a “chateau in the valley” price or a 20-carat diamond with a 5-carat tag.

You know how much money that has saved me? Not a penny. Because, much like the Women’s National Basketball Association, that’s a league in which I can not play. (For a lot of reasons, including a complex legal judgment, but you don’t want to hear about my problems.)
One of the rules of consumerism is that a bargain is only a bargain if you can afford it. And one of the problems confronting President Obama’s latest jobs plan is that even though it offers genuine, take-it-to-the-bank bargains for small-business owners to hire folks, it appears that some of those folks may not be able to afford this particular deal even if it is approved.
 
Here is the issue: Let’s say Boss Bob down at ACME Latex Products would love to hire a new person in Sales at $30,000 a year. Bob looks into his shoe box full of money and says, “I’ve got $30K!”  So far, so good. Then President Obama comes to Latexville and says, “You know, Bob, I’ll give you several thousand dollars in incentives if you’ll create that job.” Even better!

But then Bob starts adding up how much it will cost to recruit and interview candidates, possibly take them to lunch at Subway, cover payroll taxes, offer some benefits and then come up with work space, a computer and a phone on top of adding him to the Holiday Sausage gift list. That job will actually cost ACME more like $40,000-$50,000. Suddenly that check from the government starts looking a bit thin. Bob picks up the phone. “Uh, Mr. President? While I appreciate the offer, I have to say no. I mean, the latex business is improving — but not that much.”

The president clearly hopes that enough Boss Bobs will be lured by the promise of free money to take the plunge. But the buzz in the business press suggests the real, long-term expense of adding jobs when consumers are hurting has many Boss Bobs very jumpy. And changing that will be quite a job indeed.    

– CNN’s Tom Foreman is a regular on “AC360°”/www.ac360.com and “The Situation Room.”



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