President urges Congress to pass credits for vet hiring
Bob Moon: This week, the U.S. Senate is likely to approve a tax credit for employers who hire military veterans. The proposal is part of the president’s American Jobs Act. Companies that hire a long-term unemployed vets would be eligible for as much as $5,600 to help pay that vet’s salary for a year.
But Marketplace’s John Dimsdale reports incentives like this only go so far when creating a job.
John Dimsdale: The unemployment rate for veterans of Iraq and Afghanistan is above 12 percent. President Obama says that doesn’t make sense.
Barack Obama: You know what? If you can save a life on the battlefield, then you can save a life in an ambulance. If you can oversee a convoy or millions of dollars of assets in Iraq, you can help a business back home manage their supply chain or balance their books.
But employers say the president’s one-time $5,600 tax credit doesn’t go far enough when costs like relocation and training can run tens of thousands of dollars. That’s not to mention the long-term commitment of salaries, payroll taxes, health and retirement benefits.
Stephen Capp: It’s the long haul you’ve got to look at.
Stephen Capp is the CEO of Laserage Technology in Waukegan, Ill. He says the tax incentive isn’t enough to create a new job.
Capp: It seems to me the reason they’re putting these tax credits is they’re trying to get people to hire extra people. That just makes no sense to me. Because this day and age, you don’t have extra employees.
But Richard Derrickson, the CEO of Hiwasse Manufacturing in Arkansas, says his stamped metal business is improving.
Richard Derrickson: With this kind of incentive, that would certainly make me cast a favorable eye at the Air Force base that’s just a quarter of a mile down the road from us.
In a slack economy, both businessmen said no one will take advantage of this credit unless they need a new worker anyway.
In Washington, I’m John Dimsdale for Marketplace.
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