Why Factory Jobs Are Scarce: Rising Health Care Costs?

Demand may be surging, but U.S. manufacturers play it close to the vest where jobs are concerned. Instead of boosting hiring, they stretched their workweek in November and December to 41.7 hours--the longest since World War II. Economist David Hale at Kemper Financial Cos. estimates there would be 250,000 more manufacturing jobs today if the factory workweek had remained at 41.2 hours, its record level during the long expansion of the 1980s.

One possible reason for the hiring dearth, speculates Hale, may be fears that coming government-mandated benefits, particularly health care, will raise labor costs. "Ironically," he says, "while Europe is weighing a four-day workweek to cushion the effects of its expensive social insurance policies on employment, American industry is moving toward a de facto six-day workweek because of concerns that the Clinton Administration will introduce such European-style policies in the U.S."

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