Social Security

Beastly Burden

Revealing the cost of government, one paycheck at a time

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The costs of government mandates are often hidden from the people who ultimately pay for them. Earlier this year, the Michigan-based Mackinac Center for Public Policy began promoting its "Right to Know Payroll Form," a simple tool businesses can use to inform employees of how some governmental burdens affect take-home pay.

The idea is pretty straightforward: Most paycheck stubs already itemize federal, state, and city income taxes, along with the employee's share of Social Security and Medicare taxes. The Mackinac form adds to that list the employer's share of such programs, along with employer expenditures on workers' compensation and unemployment insurance. It also includes estimates of the costs of administering taxes and complying with some of the big-ticket regulations, such as the Americans with Disabilities Act and the Family Medical Leave Act.

Employees can see, in plain dollar figures, the additional chunk of cash their company must pay just to keep them on the payroll. The results can be shocking: By Mackinac's calculations, for a worker making $22,000 a year, an employer kicks in an additional $2,640 annually for the various government mandates.

Gov. John Engler has already implemented the form for Michigan's 60,000 state employees, and legislation to require a similar form for state workers seems likely to pass in Ohio. In the few months since its introduction, the form has been adopted by about a dozen private firms, including The Foremost Corporation of America, an insurance company based in Caledonia, Michigan.

Foremost's public relations manager, Ruth Steele Walker, describes the new policy as "a way to present information to our employees, so they can make better informed judgments on political decisions they may make–it gives them a little better idea of what it takes for a company to create jobs."

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