$260,000 per Job Stat on Stimulus Bill

July 15th, 2010

A facebook friend posted a comment on the stimulus bill that each job which was created cost $260,000. Assuming the math is correct, that seems appalling… for sure it seems if the folks whose jobs were created were given $260,000 each rather than a job, we’d be a lot further along… or would we.

Beginning consultants often are enticed to pick up contracts via job shops and or recruiters, rather than totally running their own show. Yet, they often get a major wakeup call when they find out, they are billed out at $100/hr, yet only get $35 in their pocket… with the recruiting/marketing firm skimming a huge amount off the top. Many have remarked, “this is greed to the max, but what do I do, I cant be out selling if I’m working….”

Obviously overhead and profit have to be covered or a firm would go out of business, but getting 65% cut off right from the get go bugs the new guy a lot… until of course they do run their own show at some point, and find out that there is a lot of overhead that someone has to pay.

Its the same deal when a govt contract comes up which will employ say 100 people… the bid is going to be for a whole lot more than just the salary paid to those hundred people. The question then becomes, what is reasonable… beyond the salary, especially when the taxpayers money is at stake.

As such, I decided to take a look at a few different firms to see what they had as far as revenue per employee. Its quite interesting.