Government Interference with Business Hiring

I’d written briefly about a move by the Obama administration to create a new protected class of people that can’t be discriminated against: unemployed people. Reader and friend GoodLuckFoxGoodLuckFox has a background in law and exposure to business; my situation is just the reverse of this. He and I disagree about whether this is a good idea. He wrote:

It’s my anecdotal opinion that having a large chunk of unemployment “gap in the resume” will MAKE you “less qualified” in the eyes of the people making the decision.

Depending on the nature of the job, the employer’s perception may be correct, or may not. If the employer is wrong — i.e., if an employee out of work a long time is still a valid employee — then someone else will hire the person and get a competitive advantage in the marketplace.

But now we’re saying that it should be a government-enforced legal decision. The result for employers: If you think that not being current on the line of work is significant, you are guilty until you’ve spent perhaps $100k to on the chance that you might prove your innocence.

Of course, anyone you don’t hire, given this new power and mandate, will be unhappy with you and only too happy to bring an action. Especially one that most employers and insurance companies will settle for tens of thousands of dollars to avoid the higher cost of winning the lawsuit and the catastrophic cost of losing it. That’s how it works now — you’re in the business; you know something about how many cases settle and how many more cases never reach the point of being an action because they were settled on the offending attorney’s first threat.

You, the evil businessperson in this new Administration tone of “the rich don’t pay their fair share,” must spend a good annual salary (that would have hired another worker) to convince a jury, or a judge with no business experience, that you were absolutely right and justified not hiring the poor little employee (which is how the jury sees many or most employment law cases now). At risk is your entire business, career, often your life savings that you’ve pumped into the enterprise.

And employers will work harder than ever to avoid hiring more people, because the government has just incentivized them in this direction. How does this help employees?

No, thank you. This is a bad idea, and merely creates another protected class and another stream of prosperity-destroying lawsuits. Does it put anyone back to work besides attorneys? No, of course, because the one job taken by a forced-in out-of-work employee will replace the candidate that you wanted to hire. No jobs gained, and you’re motivated to not hire at all if you can help it.

This New York Times editorial which I just found reaches the same conclusion.

===|==============/ Keith DeHavelle