Your theory just doesn't align to reality at all. In reality, far more of the population is working, and they are working far more hours, than in the 1960s. In those days, usually only 1 member of a household worked and they generally only worked 40 hours a week. Now 2 members of the typical household work and they work more like 50+ hours a week. So, the theory that requiring benefits and whatnot is bad because it causes employers to cut the amount they expect people to work doesn't seem to hold water at all.
Man, you need to get a job ... or an eraser.
You are trying to make it black and white ... since more people are working (your words) more hours (your words), that proves that requiring benefits (and, by extension, raising taxes) doesn't adversely affect the economy??? You really believe that? Seriously?? You need to take a macroeconomics course ... or one in logic.
Doesn't it seem perfectly logical that if you take $1,000 away from my company, that I have $1,000 less to hire people, expand, or do R&D? Let's think about that for a minute ...
Why do I provide benefits to my employees? Not because I have to (though, in some cases, the government has seen fit to inject itself into my corporate management structure) ... I provide them because my benefits package is an enticement to get the best employees available. Because I have attracted the best employees, my company is much more efficient, successful and profitable. I am getting a direct return on my investment.
If business has to provide that same benefit package to all employees in all companies, that incentive is lost, and I get nothing in return for my investment. You are now asking me to subsidize the sub-standard, and under-performing, employees. Another incentive for quality worker performance is negated by the government - everybody gets treated equally. You, on the other hand, are an A-1, upstanding, outstanding, outproducing employee. What's your reward for working so hard? Oh yeah ... nothing. Nothing other than watching those around you get the same you get despite the fact that they are producing half what you do.
It just doesn't make sense ... you're about two steps from the same wages (and benefits) for everybody regardless of their contribution. THAT is scary stuff ...