Jobs: What does it cost to add a worker? $57,967.88

[The Straight Story]

Jobs: What does it cost to add a worker?

-- There is a cacophony of voices shouting about jobs -- politicians, traders, economists, business leaders all yammering on about needing more and what it'll take to get unemployment down. With all the rhetoric, not many Americans know what it takes to fund a new job. What does it really cost to add a worker to a company's payroll? Well, here it is:

$40,630.20 (BASIC WAGE; the average weekly earnings for a private sector worker according to the Bureau of Labor Statistics is $781.35 x 52 weeks)

+ $17,064.68 (BENEFIT and TAX COST; the BLS says that for every $1 in wages, employer costs for taxes and benefits are $0.42 )

= $57,967.88 (TOTAL ANNUAL DIRECT COSTS to employers for the average worker)

And this number doesn't include the cost of rent, telephone/Internet, computer, training, etc. for the average worker -- it's just the direct costs of employing someone. Experts say these other costs can add thousand of dollars more per year, depending on the industry and job requirements.


http://www.wlsam.com/Article.asp?id=2092425

[hobbit709]

1. Very few of the people I know make $40K+ a year.

A lot of them don't even make that much per household.

The last real job I had in Austin(as a tech worker) made me about $30K, that was 10 years ago.

[Statistical]

2. Well that is why it is called an average (well technically median) wage.

50% of employees make more, 50% of employees make less but on average that is what one job costs.

[fasttense]

3. Basic wage over $40,000?????

Where did you get your numbers?

Are you referring to minimum wage? Are you referring to average wage? Are you referring to average middle class wages?

If you are referring to average wage, you must remember the Gates and Waltons who skew the numbers. Corporations tend to combine the benefits they lavish on their CEOs, CFOs and executives with the wages paid to workers. Then their numbers look all so large. But if you take out the executives, the numbers are quite piddling.

If you are referring to a middle class salary then you must know that wages have been declining for the last 10 or more years.

I know very few people who make $40,000 a year except for the children of the very wealthy.

[Statistical]

5. Median wage.

50% of employees make less, 50% of employees make more.

Median is the "middle" not the mean (commonly called average) so Bill Gates making a billion doesn't skew that.

http://www.bls.gov/news.release/wkyeng.t02.htm

[w8liftinglady]

6. a typical example- Henderson County,Texas

AVG salary(adding all salaries and dividing by earners) = $40K/Yr
Henderson County has one of the bigger lakefront property populations
I imagine their average salaries are between 150 and 500K/year
The people who live off lake...average is $320/week
They DO average out to 40K/Year

[Statistical]

7. This is why BLS doesn't use average (which you are right is a dubious stat) it uses mean.

Mean wage = 50% of employees make less than mean, 50% make more.

It is the middle wage.

http://www.bls.gov/news.release/wkyeng.t02.htm

Simplistic example. 3 people in a room.
18, 20, 99
Mean age = 20
Median (sometimes called "average") age = 45.7

[w8liftinglady]

11. That's a good point.

Unfortunately,in Henderson county,where my partner lives,I have seen the former rather than the latter.
mean income=minimum wage or a little above.
all service industry catering to the lake population.
Not even a college,hospital,or industry.

[w8liftinglady]

13. lol..thank you for making that clear to me..I confuse those things...

:toast:

[Nye Bevan]

14. The "mean" is the *average*; the "median" is the *middle*

So in your example, the average (which is also the mean) is (18+20+99)/3 = 45.7, while the median is 20.

I agree that most of the time the median is more meaningful.

[Statistical]

15. Well technically mean, median, and mode are all averages.

So using the term "average" is imprecise. Normally when someone uses the term "average" they really intend to say "mean".

BLS uses median.

For any set of data which has a large range (income ranges from few dollars to billions) median is often more useful.

[Statistical]

4. It does illustrate how ineffective the so called "stimulus" was.

$600B. If you simply paid it directly to the unemployed or paid employers to expand payroll it would have generated somewhere around

$600B / $60K ea = 10 million jobs. Latest figure is the stimulus created 3 million jobs. Roughly a 70% overhead. Another way of looking at it is $200,000 per job.

[SoCalDem]

8. Amen.. "stimulus" in a "service economy" = SHOPPING/BUYING

People without money WILL spend "found" money, thus creating a demand for "more" of whatever they are buying.

That demand spurs manufacturing to MAKE more/hire more people to make said "stuff", transport it to stores, which will then have to hire more worker-bees to unpack, fold, stack, sell the "stuff"..

The elephant in the rooms here is that 99.999999% of the "stuff" is not made here anymore, so the only jobs created will still be in the low-end-service arena.

rinse-repeat

[Fumesucker]

10. That's because the stimulus was heavily supply-side loaded..

When what we have is far more a lack of demand than a lack of supply.

[Statistical]

12. DING DING. DING. I agee 100%.

Companies will hire people. They will hire people when demand forces them to hire OR lose sales/revenue/profit.
No demand (or more technically low/falling demand) no reason to hire.

[KharmaTrain]

9. So Many Variables On This...

I don't question the statistics...cause they are just static numbers. They can't be applied to everyone as costs of living are not uniform and thus wages vary accordingly. But there's an important point that needs to be seen in this number and that is what the corporate world sees as their "expense" as workers aren't assets their "the cost of doing business"...only hired when the corporation can not only justify the expense but show a profit to be made with the hire. The stagnation of the retail economy along with tight credit make it difficult for corporations to justify additional expenses...especially with fears of a new round of rising energy prices coming.

We're stuck in a Catch-22 right now where hiring is sluggish cause sales remain slow which is caused by the lack of credit and people not having expendable income...many of us are just trying to cover the basics of food, heat and basic needs. Until there's some break in this cycle the economy will not grow and corporations won't see the justification to hire or increase wages. If anything I see more belt tightening coming...