The Inevitable Result of Government Policy on the Labor Market

Assume the following conditions:

  1. I am increasingly liable for any dumbass thing my employees say or do.  It does not matter if it is absolutely against my values and company rules, if someone, say, uses a racial epithet with a customer or another employee, I will likely at least get sued.  Given my deductibles on insurance, I am out $20,000 a case even if I win.
  2. Minimum wages have increased faster than the production value of unskilled, inexperienced laborers.
  3. Obamacare is raising the minimum cost of a full-time employee by at least $2,000-$3,000 a year, not including the as-yet-to-be-define but likely expensive record-keeping and administrative requirements 
  4. In states like California, the law increasingly gives employees the ability to make new claims on my income (e.g. fake workers comp and disability claims) or to even make themselves un-firable (by asking for a family medical leave, or claiming a disability, or claiming to be a whistle-blower).

Against this backdrop, what am I going to do?  I am going to hire more skilled and experienced workers who justify my minimum employment costs.   I am going to hire mature people less likely to get me in trouble via their immature actions.  I am going to hire people with a long work history so I can see there is not a history of scams and fraud.

In other words, I am going to hire older people.  And thus:

click to enlarge


Of all the issues I raised above, the first one gets the least attention but in our customer contact business is perhaps the most important.  The cost of hiring a knucklehead is immense.  And the folks that do stupid stuff in 1 are often the very same people who try to take us in 4.


  1. kidmugsy:

    "The cost of hiring a knucklehead is immense." Some firms get round this by having the knucklehead do the hiring.

  2. Mike Saldivar:

    "least attention but in our customer contact business is perhaps the least important" - was "least important" supposed to be "most important?"

  3. Me too:

    This is why I use a temp agency. Most of that crap is their problem. I pay a little more per hour than if I did it myself but deferring the hassle and risk is more than worth it.

  4. Gil:

    Actually what is the "market value" of a "knucklehead" nowadays? To be quite frank it would be nearly zero. Someone like that would have to undergo an internship of some sort.

  5. Jack Henneman:

    And yet, age discrimination statures (ADEA) protect the older at the expense of the younger...