The U.S. Senate passed a bill on Wednesday that will spur quick job creation, potentially affecting employers throughout the nation, including Emory.
If passed, the bill will allocate $15 billion to exempting employers from the 6.2 percent Social Security payroll tax on new hires who have been unemployed for at least 60 days. The tax exemption is set to last until the end of December this year and employers who keep new employees for at least a year may receive a $1,000 tax credit.
Whether or not the bill passes will not affect how Emory hires its staff and faculty, Associate Vice President of Human Resources Del King wrote in an e-mail to the Wheel
“We will hire based on the business need and the qualification of the applicant, rather than be directed by legislation,” he wrote.
King wrote that where eligible, however, the University will take advantage of any funding or tax relief provided by the government.
Hashem Dezhbakhsh, chair and director of the economics department, said that the bill is expected to create jobs immediately, but that the effects would only be short-term.
“It’s going to provide employers an incentive to hire unemployed workers, but once it’s expired they don’t have that incentive anymore,” he said.
An increase in job openings could potentially create a secondary effect because it can be assumed that those hired will in turn spend, but Dezhbakhsh said that long-term effects are hard to predict.
Dezhbakhsh said that the bill may cause a “bridging effect” from the nation’s current economic turmoil to a more stable economy, but that it is not expected to make a large impact.
“You cannot expect to see a substantial change,” he said, noting that the improvement will be gradual.
The bill, he said, focuses on job creation because the economy has seen improvement in other aspects such as in the value of homes and foreclosures, while the job market has not seen progress.
The 60-day unemployment requirement is meant to benefit those who might not otherwise be able to find a job, according to Dezhbakhsh.
“The longer you stay unemployed, the harsher the financial impact,” he explained. “The bill is trying to help those people.”
While the bill will create jobs quickly, Dezhbakhsh said that it is important not to forget how these plans are funded.
“One thing you also need to consider is that it’s done through government borrowing,” he said of the bill. “It’s a long-term burden and something you need to keep in mind when assessing any such short-term remedies.”
Dezhbakhsh noted that the bill would only create jobs among businesses that are already looking to hire employees, because the tax benefits are not enough of an incentive for companies to pay tens of thousands of dollars a year for new hires.
King wrote that hiring new employees will depend on need rather than on the jobs bill, but that benefits are welcome.
“We will continue to look for ways where Emory could benefit from this new legislation and continue to focus on hiring the most qualified for opportunities at Emory,” he wrote.
In addition to employer tax exemption, the bill’s provisions include allocations to the Highway Trust Fund and the “Build America” bonds. It also calls for foreign bank reporting requirements and equipment write-off allowances.
The bill passed with a 70-28 vote in the Senate and is expected to be voted on in the House of Representatives as early as this week, according to House Ways and Means Committee chairman Charles Rangel.
— Contact Alice Chen