A way to look at the “cost” of a job is by the same amount of capital return parked in T-bills. A 40000/yr job requires the equivalent 800000 if T-Bills return 5%. If they return
1%....4 million dollars.
That’s what I mean by return too low.
The point was that the author was misleading in relating the prohibitive cost of labor to paychecks (you do the same). What made jobs prohibitively expensive in such a short period of time was another cost component, namely, health-care benefits.
In the context of your example, $40,000 job cost previously $60,000 when benefits were included, but now it is a greater amount.
Finally, the computation you offered is incorrect. Capital and labor are generally nonadditive. If one hopes to get $100,000 by investing $1M in a machine that requires labor input of $40,000/year, not hiring an employee today does NOT incur the opportunity cost you indicated: the capital is a sunk cost (possibly nonsalvagable), and what is forgone is the cash flow of $60,000/year (100,000 - 40,000). It is misleading to seek an equivalent capital and compare it to risk-free return.