National Journal: Affordable Care Act actually looking pretty unaffordable

posted at 11:21 am on August 29, 2013 by Erika Johnsen

In July, the White House was in a tizzy of excitement over a New York Times article proudly proclaiming that ObamaCare was going to help to bring down New Yorkers’ insurance premiums (casually neglecting to mention that New Yorkers pay some of the highest premiums in the country due to their already ObamaCare-esque system, and that the ACA’s individual mandate will help them out by tamping down more healthy taxpayers), and President Obama seized on the story with gusto in his next speech as evidence of ObamaCare’s effectiveness in bringing down costs for Americans everywhere.

Au contraire, says National Journal in a newly released independent analysis. “For the vast majority of Americans,” they conclude, premium prices will be higher in the individual exchanges than what they are currently paying for employer-sponsored benefits:

Whether the quality of care in the new market is comparable to private offerings remains to be seen. But one thing is clear: The cost of care in the new market doesn’t stack up. A single wage earner must make less than $20,000 to see his or her current premiums drop or stay the same under Obamacare, an independent review by National Journal found. That’s equivalent to approximately 34 percent of all single workers in the U.S. seeing any benefit in the new system. For those seeking family-of-four coverage under the ACA, about 43 percent will see cost savings. Families must earn less than or equal to $62,300, or they, too, will be looking at a bigger bill. …

“In 16 states that HHS studied, premiums were on average almost 20% lower than what the Congressional Budget Office projected,” Peters wrote in an e-mail.

Premiums may be lower than predicted, but they’re not competitive with what workers are now paying for employer-sponsored care. …

The truth is, Obamacare is doing what it was intended to do: make health care affordable for the nation’s lowest earners by spreading out the costs among taxpayers.

Hey, remember President Obama’s erstwhile promise to not raise taxes on the middle class? Sorry, Democrats, but there aren’t enough “fair share” tax payments from the wealthy that could even come close to remotely defraying this sucker by their lonesome.

And of course, the sprawling consequences of ObamaCare for both the middle class and the working poor aren’t merely confined to higher taxes — as the National Journal article also points out, employers are going part time and dropping jobs right and left in anticipation of compliance, precisely none of which is going to help fuel our economy back into robust-prosperity mode:

Bureau of Labor Statistics data show that the ratio of part-time to full-time jobs has completely flipped this year from historical trends.  Last year, six full-time jobs were created for every one part time job.  This year, only one full-time job is being created for every four new part-time jobs.

The shift to part-time has accelerated over the past several months because of the “look back” provision in ObamaCare that sets the baseline this year for the number of full-time workers a company employs to determine their compliance with the employer pay-or-play mandate. …

According to a survey by the U.S. Chamber of Commerce, 71% of small businesses say the health care law makes it harder to grow.  One-half of small businesses that must comply with the employer mandate say they will either cut hours of full-time employees or replace them with part-time workers. Twenty four percent say they will reduce hiring to stay under 50 employees.


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“In a few years the states will pay 10% of the cost and the feds will pay %100 of the cost.”

-libfree

Officially one of my all-time favorite comments here.

Bishop on August 29, 2013 at 11:24 AM

Go away, Queen of Death!

22044 on August 29, 2013 at 11:25 AM

The NJ article assumes that if an employer drops coverage, they won’t raise wages to compensate. That defies the laws of supply and demand for labor.

red_herring on August 29, 2013 at 11:27 AM

gee I wonder who could have seen this coming. what a tragedy that nobody tried to warn people…..

dmacleo on August 29, 2013 at 11:27 AM

Math problems aside, the 10/100% thing galls me because of the innate liberal assumption that federal money just is. It comes from a magic tree made of rich people I guess.

WitchDoctor on August 29, 2013 at 11:27 AM

The caption beneath the scumhag’s picture s/b “Nurse Ratched”.

Schadenfreude on August 29, 2013 at 11:30 AM

That’s the plan, so the regime can swoop in to save the day.
On to single payer…

fortcoins on August 29, 2013 at 11:31 AM

The new lib talking point is that businesses who cut people’s hours will go bankrupt because they can’t hire good employees.

You can’t make this stuff up.

VinceOfDoom on August 29, 2013 at 11:33 AM

OK, so now that we’ve seen what’s in the bill we now need to repeal the bill so we don’t have to live with what’s in it.

Flange on August 29, 2013 at 11:33 AM

Bishop on August 29, 2013 at 11:24 AM

I found that so incredible, I had to look up the quote myself:

What part of “the federal government pays 100% of the costs and the state pays 10% of the cost in ten years” do you not understand?

libfreeordie on August 28, 2013 at 3:13 PM

Math is hard. And, no, I do not understand.

pain train on August 29, 2013 at 11:33 AM

Math problems aside, the 10/100% thing galls me because of the innate liberal assumption that federal money just is. It comes from a magic tree made of rich people I guess.

WitchDoctor on August 29, 2013 at 11:27 AM

The worst way to fund something is to use money transferred from one entity to another, whether it is called aid, subsidy, block grant, matching funds, or shared revenue. A certain percentage always sticks around at the “donor” level of government.

Steve Eggleston on August 29, 2013 at 11:33 AM

D’oh

cmsinaz on August 29, 2013 at 11:34 AM

Wheeee!

Good Lt on August 29, 2013 at 11:35 AM

The NJ article assumes that if an employer drops coverage, they won’t raise wages to compensate. That defies the laws of supply and demand for labor.

red_herring on August 29, 2013 at 11:27 AM

Really? “Supply and demand”? Have you looked at the numbers of the long term UNEMPLOYED?

There is no ‘labor shortage’ to keep wages high.

Matter of fact, Democrats are doing everything in their power to bring more workers in from Mexico….under the guise of ‘immigration reform’.

GarandFan on August 29, 2013 at 11:36 AM

The NJ article assumes that if an employer drops coverage, they won’t raise wages to compensate. That defies the laws of supply and demand for labor.

red_herring on August 29, 2013 at 11:27 AM

Not really, when real unemployment is in double digits.

Barack Obama supporters like yourself ought to think twice about invoking economics, because you understand it even less than your half-witted imbecile messiah does.

northdallasthirty on August 29, 2013 at 11:38 AM

Who could of predicted this?

British Health Care Predictably Running Out Of Money
http://news.investors.com/ibd-editorials/082813-669050-british-health-service-on-brink-of-crisis.htm

Colbyjack on August 29, 2013 at 11:39 AM

Either ACA was planned / intended to fail, or the Jacobins who wrote this clusterfark are completely clueless when it comes to understanding how markets and the economy actually operate.

My vote is on both being the case.

Athos on August 29, 2013 at 11:40 AM

Really? “Supply and demand”? Have you looked at the numbers of the long term UNEMPLOYED?

There is no ‘labor shortage’ to keep wages high.

Matter of fact, Democrats are doing everything in their power to bring more workers in from Mexico….under the guise of ‘immigration reform’.

GarandFan on August 29, 2013 at 11:36 AM

I’m not saying wages have to stay “high.” However, they also won’t just drop suddenly because of OCare. If employers stop offering healthcare benefits and don’t increase wages, workers will start to look elsewhere. The best workers (at the very least) will be able to find work elsewhere.

red_herring on August 29, 2013 at 11:41 AM

Not really, when real unemployment is in double digits.

Barack Obama supporters like yourself ought to think twice about invoking economics, because you understand it even less than your half-witted imbecile messiah does.

northdallasthirty on August 29, 2013 at 11:38 AM

But wages + benefits already account for the double digit real unemployment. If employers could get away with a real wage decrease on account of unemployment being so high, they would have already done it.

red_herring on August 29, 2013 at 11:42 AM

I’m not saying wages have to stay “high.” However, they also won’t just drop suddenly because of OCare. If employers stop offering healthcare benefits and don’t increase wages, workers will start to look elsewhere. The best workers (at the very least) will be able to find work elsewhere.

red_herring on August 29, 2013 at 11:41 AM

What is it like in Fantasy World?

katy the mean old lady on August 29, 2013 at 11:45 AM

What is it like in Fantasy World?

katy the mean old lady on August 29, 2013 at 11:45 AM

So Econ 101 is fantasy world?

red_herring on August 29, 2013 at 11:45 AM

The caption beneath the scumhag’s picture s/b “Nurse Ratched”.

Schadenfreude on August 29, 2013 at 11:30 AM

Apt…. as would Frau Blücher.

[horses whinny]

hawkeye54 on August 29, 2013 at 11:46 AM

I know, let’s ask the people who are responsible for this law to be in charge of fixing it for the next few decades!! That way they will never have to worry about their job safety again because we will need them to figure out how to deal with this complicated issue. Because after all the concept of a person going to the doctor and paying for his own treatment is just too hard to understand.

txmomof6 on August 29, 2013 at 11:46 AM

If employers stop offering healthcare benefits and don’t increase wages, workers will start to look elsewhere. The best workers (at the very least) will be able to find work elsewhere.

Sigh…

Employers don’t have to increase wages even if they stop offering healthcare benefits in the current economy…..if the current workers don’t want that, then there are plenty of workers seeking work who will be thrilled to accept that job. And in this economy, employee mobility is also down significantly.

Look at one of the effects of the ACA – UPS just announced that for at least 15,000 employees will find their spouses no longer covered under the health insurance program. How many of those employees are going to quit / find other jobs in this marketplace in opposition to UPS making that decision? Very very few. With a real unemployment over 11% – they will keep their jobs.

Or how about the retailers who are eliminating full time jobs and reducing everyone’s hours so that they work <30 hours a week…. none of those employees are happy with the pay / benefit cut – but most aren't going to find other jobs because the more who look for jobs reduces the pressure on employers to offer higher wages / benefit packages.

Athos on August 29, 2013 at 11:48 AM

Apt…. as would Frau Blücher.

[horses whinny]

hawkeye54 on August 29, 2013 at 11:46 AM

I vote, I say, I vote for the hen in the old Foghorn Leghorn cartoons.
You know the one with that ole rollin’ pin.

Flange on August 29, 2013 at 11:49 AM

If employers stop offering healthcare benefits and don’t increase wages, workers will start to look elsewhere. The best workers (at the very least) will be able to find work elsewhere.

red_herring on August 29, 2013 at 11:41 AM

Many of them are not or cannot find work elsewhere. Very few workers have any leverage or means to do so. IMO, quitting a paying job in this economy is weapons-grade stupid unless you have something better 100% lined up.

fortcoins on August 29, 2013 at 11:50 AM

Bishop on August 29, 2013 at 11:24 AM

I found that so incredible, I had to look up the quote myself:

What part of “the federal government pays 100% of the costs and the state pays 10% of the cost in ten years” do you not understand?

libfreeordie on August 28, 2013 at 3:13 PM

Math is hard. And, no, I do not understand.

pain train on August 29, 2013 at 11:33 AM

Yep, that’s a keeper.

slickwillie2001 on August 29, 2013 at 11:50 AM

So Econ 101 is fantasy world?

red_herring on August 29, 2013 at 11:45 AM

In the current job market? Your interpretation is.

katy the mean old lady on August 29, 2013 at 11:51 AM

I know, let’s ask the people who are responsible for this law to be in charge of fixing it for the next few decades!! That way they will never have to worry about their job safety again because we will need them to figure out how to deal with this complicated issue. Because after all the concept of a person going to the doctor and paying for his own treatment is just too hard to understand.

txmomof6 on August 29, 2013 at 11:46 AM

The ultimate objective of a fascist dictator is to have a web of laws so complex that only they can interpret the web and decide who is guilty of breaking the law. Obamacare is becoming exactly that.

slickwillie2001 on August 29, 2013 at 11:53 AM

Either ACA was planned / intended to fail, or the Jacobins who wrote this clusterfark are completely clueless when it comes to understanding how markets and the economy actually operate.

My vote is on both being the case.

Athos on August 29, 2013 at 11:40 AM

It was mostly the latter. It was a politically designed bill put togther in a way that essentially bribed the insurers and pharmaceutical companies to not oppose it. It threw in nonsensical taxes like the medical device tax in order to gin up a phony “deficit neutral” pronouncement by the CBO. They thought all the states would jump at the “free money” to expand Medicaid. They thought that everyone would be good little sheep and buy individual policies that are excessive and expensive instead of paying a nominal tax – which nobody will pay either.

So much stupidity went into this thing, it is really staggering.

rockmom on August 29, 2013 at 11:54 AM

Or how about the retailers who are eliminating full time jobs and reducing everyone’s hours so that they work <30 hours a week…. none of those employees are happy with the pay / benefit cut – but most aren't going to find other jobs because the more who look for jobs reduces the pressure on employers to offer higher wages / benefit packages.

Athos on August 29, 2013 at 11:48 AM

I realize that employers have the bargaining power in this economy. But don’t you think that they realized this years ago and have been adjusting wages accordingly since then?

Let’s say you make $2,500/month in wages and your employer pays $500/month of your healthcare premium. That means you make $3000/month. If your employer drops coverage, you’re all of a sudden making $2,500/month. If the employer could get away with that, why wouldn’t they only be paying you $2,000 wages and $500 benefits right now? They’d be stupid not to. Like you said, the employees can’t find other work, so they’re stuck.

red_herring on August 29, 2013 at 11:54 AM

The good news is McDonalds is able to reduce the numbers of their employees from those walking off the job today. The idiots haven’t learned at least a little money coming in beats no money at all.

TulsAmerican on August 29, 2013 at 11:55 AM

In the current job market? Your interpretation is.

katy the mean old lady on August 29, 2013 at 11:51 AM

I think you fail to see that the labor market already accounts for the current job market and sets wages accordingly.

red_herring on August 29, 2013 at 11:55 AM

If employers could get away with a real wage decrease on account of unemployment being so high, they would have already done it.

They are – Forever 21, the retailer, dropped all the wages / benefits for the vast majority of their employees when they eliminated full time (40 hr / week positions) and replaced them with part-time positions (no more than 30 hr / week). That’s just over a 20% cut in wages plus the elimination of full-time benefits.

In IT – Project managers and developers who used to get $90-125 / $75-100 per hour for contract work are now getting hourly wages at least a third lower than 5 years ago. Why? So many on the market that prices / wages are dropping.

If you were an employer and an employee who used to make $60K a year plus benefits left – with the number of people looking for work today, you could hire a replacement easily saving you 10-20% in costs before benefits were factored. You, the employer, wouldn’t demand current employees take a pay cut unless your business was in dire peril, because of the negative morale impact, but the prevailing tendencies in this Obama economy is that wages are decreasing.

Athos on August 29, 2013 at 11:56 AM

Just wait until the item in Obamacare kicks in that shifts the total cost for the Disproportionate Share Hospitals (DSH – the county/state hospitals)to the State. NY, Cali, MI & Il will be instantly bankrupt and have to shut down those hospitals – people will be literally dying in the street due to the Obamacare.

As it is designed to do.

batterup on August 29, 2013 at 11:59 AM

I think you fail to see that the labor market already accounts for the current job market and sets wages accordingly.

red_herring on August 29, 2013 at 11:55 AM

Are you on strike from McDonalds? You can’t even agree with your own comments.

katy the mean old lady on August 29, 2013 at 12:00 PM

What part of “the federal government pays 100% of the costs and the state pays 10% of the cost in ten years” do you not understand?

libfreeordie on August 28, 2013 at 3:13 PM

Math is hard. And, no, I do not understand.

pain train on August 29, 2013 at 11:33 AM

That’s proof right there of what I said, often. The lives like a slave made it on hue alone.

Schadenfreude on August 29, 2013 at 12:00 PM

I really don’t know how I fit into the Consolidated Affordable Care Act. I live in Dubai, and therefore don’t fall under CACA. My wife, though, spends a lot of time in the US, so maybe she does fall under CACA. We file as foreign residents, which makes us exempt, but she gets medical care in the US… I really don’t know if we’ll have to pay the fine since she doesn’t have insurance, but I do, and she’s covered when she’s over here in Dubai.

What a great law! It’s perfect, because you don’t know if you’re breaking it or not, so the government gets to decide your fate, and they don’t even need to explain their reasoning!

Wino on August 29, 2013 at 12:00 PM

If you were an employer and an employee who used to make $60K a year plus benefits left – with the number of people looking for work today, you could hire a replacement easily saving you 10-20% in costs before benefits were factored. You, the employer, wouldn’t demand current employees take a pay cut unless your business was in dire peril, because of the negative morale impact, but the prevailing tendencies in this Obama economy is that wages are decreasing.

Athos on August 29, 2013 at 11:56 AM

So what does that have to do with OCare? It seems to me that you’re saying that employers now have an excuse to reset wages to the proper level. That seems to be a good thing to me.

red_herring on August 29, 2013 at 12:00 PM

Officially one of my all-time favorite comments here.

Bishop on August 29, 2013 at 11:24 AM

Bish, an oldie but goldie. ; )

Two reasons:

1) Her voice makes dogs howl. It is easier on the ears to hear fingernails on chalkboard.

2) She is pretty dumb. She jumped through 7 weak barely accreddited or non-accreddited schools to get a weak bachelors degree.

2) The Glenn Rick issue.

Jailbreak on February 11, 2012 at 7:08 PM

Math is hard ‘n’ s#!t.

Walter Sobchak on February 11, 2012 at 8:02 PM

Bmore on August 29, 2013 at 12:01 PM

Math problems aside, the 10/100% thing galls me because of the innate liberal assumption that federal money just is. It comes from a magic tree made of rich people I guess.

WitchDoctor on August 29, 2013 at 11:27 AM

It comes from the magic Zimbabwe … I mean Fed … printing press.

besser tot als rot on August 29, 2013 at 12:01 PM

I’m not saying wages have to stay “high.” However, they also won’t just drop suddenly because of OCare.

red_herring on August 29, 2013 at 11:41 AM

Yeah, it’s not like…

Bureau of Labor Statistics data show that the ratio of part-time to full-time jobs has completely flipped this year from historical trends. Last year, six full-time jobs were created for every one part time job. This year, only one full-time job is being created for every four new part-time jobs.

Yeah, it’s not like that’s happening at all.

I think you need to define your fantasy version of “suddenly” for us. Because when the ratio of part-time to full-time jobs completely flips in less than a one year period, ***I*** think it’s sudden. I don’t know what you consider it in your fantasy land…

dominigan on August 29, 2013 at 12:04 PM

The caption beneath the scumhag’s picture s/b “Nurse Ratched”.

Schadenfreude on August 29, 2013 at 11:30 AM

Caption Contest!

How ’bout: “Now I am become Death …”

ShainS on August 29, 2013 at 12:04 PM

If employers stop offering healthcare benefits and don’t increase wages, workers will start to look elsewhere. The best workers (at the very least) will be able to find work elsewhere.

red_herring on August 29, 2013 at 11:41 AM

Look elsewhere WHERE? Another country?

HotAirian on August 29, 2013 at 12:05 PM

red_herring on August 29, 2013 at 11:55 AM

Athos on August 29, 2013 at 11:56 AM

It will get much worse if the nation is flooded with ten or twenty million amnestees that are exempted from Obamacare.

slickwillie2001 on August 29, 2013 at 12:08 PM

Look elsewhere WHERE? Another country?

HotAirian on August 29, 2013 at 12:05 PM

The best workers still have some bargaining power. I’m sure other employers would happily snatch them up.

red_herring on August 29, 2013 at 12:09 PM

HotAirian on August 29, 2013 at 12:05 PM

Consider its nom. ; )

Bmore on August 29, 2013 at 12:10 PM

If employers stop offering healthcare benefits and don’t increase wages, workers will start to look elsewhere. The best workers (at the very least) will be able to find work elsewhere.

red_herring on August 29, 2013 at 11:41 AM

No kidding, so the poor and downtrodden who are supposedly the recipients of this abomination of a law can just up and leave for better climes when their current employer drops coverage and fails to raise pay?

O_o

Bishop on August 29, 2013 at 12:10 PM

The best workers still have some bargaining power. I’m sure other employers would happily snatch them up.

red_herring on August 29, 2013 at 12:09 PM

So there you have it. CACA is good for the elite, but for the rest? Let them eat cake. Just another liberal supporting the rich at the expense of the middle class. Thanks for the confession, Comrade_herring.

Wino on August 29, 2013 at 12:11 PM

No kidding, so the poor and downtrodden who are supposedly the recipients of this abomination of a law can just up and leave for better climes when their current employer drops coverage and fails to raise pay?

O_o

Bishop on August 29, 2013 at 12:10 PM

I take from your comment that you don’t believe that the laws of supply and demand govern labor. If that’s the case, and employers can simply lower wages without consequence, then you’re correct that my original point doesn’t reflect reality. I respectively disagree.

red_herring on August 29, 2013 at 12:15 PM

What everyone is failing to realize is what happens after one year, at which point the insurers will have data to support their prices – there is no way for them to really underwrite what they are doing now, whole new frontier.

We will see another huge increase in costs in 2015.

Zomcon JEM on August 29, 2013 at 12:16 PM

Really? “Supply and demand”? Have you looked at the numbers of the long term UNEMPLOYED?

There is no ‘labor shortage’ to keep wages high.

Matter of fact, Democrats are doing everything in their power to bring more workers in from Mexico….under the guise of ‘immigration reform’.

GarandFan on August 29, 2013 at 11:36 AM

Not really, when real unemployment is in double digits.

Barack Obama supporters like yourself ought to think twice about invoking economics, because you understand it even less than your half-witted imbecile messiah does.

northdallasthirty on August 29, 2013 at 11:38 AM

Thank you both for saying this before I did.

Amazing how a guy named “red-herring” is being willfully blind to the obvious. It’s almost like he’s throwing out a bogus comment to distract everyone from reality.

njrob on August 29, 2013 at 12:16 PM

That means you make $3000/month. If your employer drops coverage, you’re all of a sudden making $2,500/month. If the employer could get away with that, why wouldn’t they only be paying you $2,000 wages and $500 benefits right now?

What’s a more volatile cost for an employer? The wage they are paying or the cost of their benefits?

By far the more volatile cost is the cost of the benefits, particularly in the wake of the disaster called the ACA. Here in CA, healthcare costs for business are looking at increases in the 35% to 50% (at least) – worst for the small businesses who are seeing companies withdraw from the state’s planned exchanges. That means the $500 / month this year will be $800-$1000 next year….per employee.

How is the business owner going to accept that increase in their costs? Raise prices of their goods? How practical is that? Absorb the higher costs? Few have the ability to do that for very long and remain in business. They are left with either reducing wages or reducing the number of employees or eliminating benefits and making it the responsibility of the employee….but if they eliminate benefits, there are other negative effects on the employer (taxes) that have to be factored in.

What will impact their costs the least and also maintain the current level of productivity becomes key parts of the equation.

You make your case like a typical prog – assuming that everything is neat and clean like in an academic exercise. The markets aren’t neat and clean – human factors, intended / unintended consequences as well as the basic rules of economics all come into play. We can no longer trust the economic numbers from our government because of the ways the books have been cooked. We can trust what companies are doing – and understand their motivations / reasons for doing what they are doing.

Athos on August 29, 2013 at 12:17 PM

The media died the day president Reagan was installed. After that it simply became an arm of the progressive movement. There was still some opposition from old timers still in the business during the Reagan/Bush years and the beginning of the Clinton years but when these people got older and passed away, there is no more balance. It is clear these people simply ignored those who said this would happen, because they were enthralled by the historic moment. Now it is too little, too late.

ojfltx on August 29, 2013 at 12:18 PM

The best workers still have some bargaining power. I’m sure other employers would happily snatch them up.

red_herring on August 29, 2013 at 12:09 PM

Not when the same perverse dis-incentive is applied across every employer via a FEDERAL law! It will eventually be applied across everyone as companies that still offer good benefits will not be able to compete financially against those that don’t.

Government is applying a broad penalty to workers which will artificially depress wages/benefits and you’re still trying to defend it.

dominigan on August 29, 2013 at 12:19 PM

If the Dems could get out of the Obamacare mess, most think they would. Realizing they made a huge mistake, it is too late to save face. Any Dem who voted for it, needs to go.

Amazingoly on August 29, 2013 at 12:19 PM

So there you have it. CACA is good for the elite, but for the rest? Let them eat cake. Just another liberal supporting the rich at the expense of the middle class. Thanks for the confession, Comrade_herring.

Wino on August 29, 2013 at 12:11 PM

So a system in which the best workers are better off is bad? Sounds like you’re the true commie here!

red_herring on August 29, 2013 at 12:19 PM

The best workers still have some bargaining power. I’m sure other employers would happily snatch them up.

red_herring on August 29, 2013 at 12:09 PM

WHAT other employers? You are contradicting yourself. You just said:

If employers stop offering healthcare benefits and don’t increase wages, workers will start to look elsewhere.

Again, if employers are not offering healthcare benefits or wage increases, where are these “better” workers going to go? To different employers who won’t offer them either? Or some kind of whimsical fantasy employer that you think will magically appear to suddenly give away all those goodies? Ever heard of the word “competition”? I bet you have no working understanding of what that entails. If companies “A through “Y”” stop paying for the free goodies how is company “Z” going to compete with them by giving away the farm?

HotAirian on August 29, 2013 at 12:19 PM

Wow, who could have seen this coming?

Chris of Rights on August 29, 2013 at 12:19 PM

If that’s the case, and employers can simply lower wages without consequence

If they all did it at the same time because of some bad federal law, then yes, they can get away with it. It would be collusion if they were to do it on purpose. Because it is being driven by CACA, the boards are actually forced to do it to fulfill their fiduciary duties to the corporation’s shareholders.

Of course, the elites can still get their golden parachutes. It’s only the vast majority of Americans who will suffer due to this.

Wino on August 29, 2013 at 12:19 PM

I take from your comment that you don’t believe that the laws of supply and demand govern labor. If that’s the case, and employers can simply lower wages without consequence, then you’re correct that my original point doesn’t reflect reality. I respectively disagree.

red_herring on August 29, 2013 at 12:15 PM

Then please explain how our current conditions of double-digit real unemployment, additional regulations to stifle job creation, and moving to legitimize millions of cheap laborers will be beneficial to existing workers.

YOU are the one ignoring the laws of supply and demand.

dominigan on August 29, 2013 at 12:21 PM

Again, if employers are not offering healthcare benefits or wage increases, where are these “better” workers going to go? To different employers who won’t offer them either? Or some kind of whimsical fantasy employer that you think will magically appear to suddenly give away all those goodies? Ever heard of the word “competition”? I bet you have no working understanding of what that entails. If companies “A through “Y”” stop paying for the free goodies how is company “Z” going to compete with them by giving away the farm?

HotAirian on August 29, 2013 at 12:19 PM

Well, Company Z is going to attract all the best workers without having to raise wages. A and Y may be paying lower wages, but they also have inferior employees. It seems like that would put Z in an ok position to compete.

red_herring on August 29, 2013 at 12:23 PM

If that’s the case, and employers can simply lower wages without consequence…..

Specifically explain then why real wages are decreasing and are continuing to decrease?

Wages are being lowered. Forever 21 just hit the vast majority of their employees with more than a 20% wage decrease when they eliminated full time positions and made all those positions part-time. Their specific reason for doing so was because of ACA.

Athos on August 29, 2013 at 12:23 PM

Every time I see a picture of that woman I feel sick.

bluegill on August 29, 2013 at 12:24 PM

I take from your comment that you don’t believe that the laws of supply and demand govern labor. If that’s the case, and employers can simply lower wages without consequence, then you’re correct that my original point doesn’t reflect reality. I respectively disagree.

red_herring on August 29, 2013 at 12:15 PM

Sure they apply to labor but you’re failing to account for the labor market distortions being created and applied by the same people who birthed the stupid BarkyCare scheme.

Who was the law intended to help and who are being affected most by the resulting actions of employers. To say that anyone can just up and leave and find better elsewhere is ignoring the stark evidence all around you that it’s becoming close to impossible for an increasing number of people.

Bishop on August 29, 2013 at 12:24 PM

If they all did it at the same time because of some bad federal law, then yes, they can get away with it. It would be collusion if they were to do it on purpose. Because it is being driven by CACA, the boards are actually forced to do it to fulfill their fiduciary duties to the corporation’s shareholders.

Of course, the elites can still get their golden parachutes. It’s only the vast majority of Americans who will suffer due to this.

Wino on August 29, 2013 at 12:19 PM

Like I said, I respectfully disagree with your analysis. I also don’t think it’d be a breach of fiduciary duty to maintain benefits if it means that you’ll attract better workers and have higher morale (and potentially healthier employees).

red_herring on August 29, 2013 at 12:25 PM

So a system in which the best workers are better off is bad? Sounds like you’re the true commie here!

red_herring on August 29, 2013 at 12:19 PM

You are ignoring the fact that the best workers will ALSO suffer a degradation in wages and benefits as less money will be available for either benefits or INCREASES.

You are an absolute fool if you think a harsher environment will be better for the best workers. It will allow them to remain where they are in comparison to others. Their relationship with poorer workers will not change, but their individual experience will get worse as they have to take on more work (covering for fewer coworkers) and worse/fewer increases (budget cutbacks by the employers) resulting in salary stagnation. Yeah… that’s a great way to foster “best” workers… stifle everyone and see who still wants to put in more hours! YAY EVERYONE!

dominigan on August 29, 2013 at 12:26 PM

Herring, if this is your understanding of econ 101, you weren’t paying attention-or you had the wrong perfesser. Did you take this from libfree?

Let’s say you make $2,500/month in wages and your employer pays $500/month of your healthcare premium. That means you make $3000/month. If your employer drops coverage, you’re all of a sudden making $2,500/month. If the employer could get away with that, why wouldn’t they only be paying you $2,000 wages and $500 benefits right now? They’d be stupid not to. Like you said, the employees can’t find other work, so they’re stuck.

red_herring on August 29, 2013 at 11:54 AM

No, that means it cost your employer at least 3k per month.

But wages + benefits already account for the double digit real unemployment. If employers could get away with a real wage decrease on account of unemployment being so high, they would have already done it.

red_herring on August 29, 2013 at 11:42 AM

Employers use a market like this to decrease costs. A real wage “decrease” does not (often) occur among those already employed, but among those hired-if they are hired. People are just hired in at a lower wage than they would have been in a good economy.

I’m not saying wages have to stay “high.” However, they also won’t just drop suddenly because of OCare. If employers stop offering healthcare benefits and don’t increase wages, workers will start to look elsewhere. The best workers (at the very least) will be able to find work elsewhere.

red_herring on August 29, 2013 at 11:41 AM

As Athos so ably pointed out, the costs employers are willing to pay have dropped suddenly because of OCare. Employees are cut back to part time-decreasing both wages and employer costs. Add to Athos’ examples that of UPS dropping spousal coverage, and you get a prime example of employers cutting costs-which cuts will lead to a defacto wage cut if employees now try to cover the costs of that coverage out of pocket.

Go back and retake the class from someone who knows what they are talking about.

questionmark on August 29, 2013 at 12:28 PM

Well, Company Z is going to attract all the best workers without having to raise wages. A and Y may be paying lower wages, but they also have inferior employees. It seems like that would put Z in an ok position to compete.

Is Company Z’s productivity and efficiency going to be significantly greater than that from companies A and Y?

Companies A and Y, could also, because they pay lower wages, have sufficient lower costs where they can sell their products / services at a price lower than Company Z. Who is to say that the in the marketplace the price savings to the consumer wouldn’t be enough to drive more business to those companies? Simply because they have ‘inferior employees’, Company Z will win in the marketplace?

One can say tripe like ‘inferior employees’ if one is just trying to create a case to fit a preconceived ideologically driven conclusion – but it doesn’t fly in the real world.

Athos on August 29, 2013 at 12:30 PM

If this actually gets implemented it will only take about 3 years for the gov to run out of money and if it happens that fast single payer may not look like an option. At that point it’s 2016 and we will still have some insurance co. in business if we have the will to really fix the system and get out of the way.

tim c on August 29, 2013 at 12:30 PM

Go back and retake the class from someone who knows what they are talking about.

questionmark on August 29, 2013 at 12:28 PM

Which “perfesser” would you recommend?

red_herring on August 29, 2013 at 12:30 PM

Sure they apply to labor but you’re failing to account for the labor market distortions being created and applied by the same people who birthed the stupid BarkyCare scheme.

Bingo. These “other employers” he speaks of are subject to the same economic constraints everyone else is. Going bankrupt with the “best workers” in the industry is no virtue.

tommyboy on August 29, 2013 at 12:31 PM

Companies A and Y, could also, because they pay lower wages, have sufficient lower costs where they can sell their products / services at a price lower than Company Z. Who is to say that the in the marketplace the price savings to the consumer wouldn’t be enough to drive more business to those companies? Simply because they have ‘inferior employees’, Company Z will win in the marketplace?

One can say tripe like ‘inferior employees’ if one is just trying to create a case to fit a preconceived ideologically driven conclusion – but it doesn’t fly in the real world.

Athos on August 29, 2013 at 12:30 PM

No disagreements with you there. But if that really is the winning strategy, why aren’t companies A and Y already doing it? Why are they being “forced” by OCare to do it?

red_herring on August 29, 2013 at 12:32 PM

It’s neat to get a real-time glimpse of how (D) programs get their support.
 
Thanks to all involved.

rogerb on August 29, 2013 at 12:33 PM

red_herring’s problem is that he/she/it doesn’t understand the difference between surviving and thriving. A “best” worker will survive better than a “poor” worker. But that doesn’t mean they will thrive… they will just survive better than someone else.

I also noticed that he/she/it ignored my link PROVING that employers are making hiring changes NOW based on OCare by changing from full-time to part-time jobs.

To promote an environment that makes it more difficult for workers to thrive, but instead switch to trying their “best” to survive is a really SICK thing for someone to be defending.

Yeah, making it harder for everyone to survive is a great thing!!!! /sarc

dominigan on August 29, 2013 at 12:33 PM

Which “perfesser” would you recommend?

red_herring on August 29, 2013 at 12:30 PM

Anything by Thomas Sowell and/or Walter Williams.

questionmark on August 29, 2013 at 12:33 PM

In lieu of an actual class that is.

questionmark on August 29, 2013 at 12:34 PM

It’s all what obama wants, and the Rs in DC too, most of them.

The labor force, qualified and not, will increasingly be filled with legal/illegal foreigners, at any low rate (which is still at least 10 times what they’d get in the shitholes they left behind). They’ll get obama’care’ by fiat, just because obama says so.

All else is a red herring.

Schadenfreude on August 29, 2013 at 12:35 PM

Milton Friedman is also worth reading. And Friedrich Hayek.

questionmark on August 29, 2013 at 12:36 PM

In my company, when someone leaves, they do not hire another worker to replace them. They take the former employee’s duties and divvy them up amongst the remaining worker bees. IMO, that trend will worsen as Obamacare keeps clusterfarking along.

fortcoins on August 29, 2013 at 12:37 PM

Milton Friedman is also worth reading. And Friedrich Hayek.

questionmark on August 29, 2013 at 12:36 PM

The series starts here.

Schadenfreude on August 29, 2013 at 12:38 PM

The series starts here.

Schadenfreude on August 29, 2013 at 12:38 PM

To the right are myriad of links, all related.

Schadenfreude on August 29, 2013 at 12:39 PM

I also noticed that he/she/it ignored my link PROVING that employers are making hiring changes NOW based on OCare by changing from full-time to part-time jobs.

To promote an environment that makes it more difficult for workers to thrive, but instead switch to trying their “best” to survive is a really SICK thing for someone to be defending.

Yeah, making it harder for everyone to survive is a great thing!!!! /sarc

dominigan on August 29, 2013 at 12:33 PM

Sorry, lots of people to respond to. As to the part time issue, I have two thoughts:

1. Forever 21 might just be using OCare for PR reasons – “It’s not our fault we have to cut your hours, it’s Obamas” In other words, I don’t think Forever 21 citing to OCare actually “proves” anything.
2. That being said, the trend in new jobs being part time is troubling. I think that’s a separate issue, though, than what I’ve been arguing (all else staying constant, employers can’t simply cut health benefits without increasing wages).

red_herring on August 29, 2013 at 12:40 PM

But wages + benefits already account for the double digit real unemployment. If employers could get away with a real wage decrease on account of unemployment being so high, they would have already done it.

red_herring on August 29, 2013 at 11:42 AM

I get the point you’re trying to make and it’s one not easily dismissed. However — some opportunities for economic phenomena like “money illusion” or other departures from frictionless adjustment and perfect information are institutional in nature. For example, Keynesians often point to employment contracts (a real-world institution) as a source of downward-sticky wages. The implementation of PPACA in this labor market, with the real informational asymmetries present (do you know what your employer actually pays for your insurance) is an institutional opportunity for producer surplus to result from an incomplete or non-compensating shift of employment cost from health insurance to wages. There’s some friction here, some loss, and it’s likely to be borne by employees.

DrSteve on August 29, 2013 at 12:52 PM

Math problems aside, the 10/100% thing galls me because of the innate liberal assumption that federal money just is. It comes from a magic tree made of rich people I guess.

WitchDoctor on August 29, 2013 at 11:27 AM

Notwithstanding the difficulty with math he exhibits, he also got the liability confused.

For now, the states will pay ~10%. In time, it goes to 100%. This is the bait offered to the governors and legislators of the states to get them to agree to the expansion in MedicAid programs. Virtually none of the governors who signed onto the ACA provision will be in, or be eligible for, the governors office when the whole cost gets laid onto the state’s treasury’s.

Kick the can. On steroids.

BobMbx on August 29, 2013 at 12:52 PM

Sorry, the use of “producer surplus” above was imprecise. Just call it rents (gained by the firm) from the exchange of labor at something other than a market-clearing wage.

DrSteve on August 29, 2013 at 12:54 PM

2. That being said, the trend in new jobs being part time is troubling. I think that’s a separate issue, though, than what I’ve been arguing (all else staying constant, employers can’t simply cut health benefits without increasing wages).

red_herring on August 29, 2013 at 12:40 PM

Yep…no connection at all.

By the way, what current law requires employers to maintain full time employees, or to offer any benefits at all (current meaning without ObamaCare)?

Where does “thou shalt make full time employees of all your workers, and give them generous benefits to boot” appear in law?

BobMbx on August 29, 2013 at 12:56 PM

DrSteve on August 29, 2013 at 12:52 PM

Good points. While I agree that there isn’t perfect information (although I personally believe I have a pretty good sense of how much my employer pays for healthcare) I do think that people have a visceral reaction to having their health benefits cut. Perhaps I have too small of a sample size, but many people I know would take a wage cut over having their health insurance cut. (That, of course, may change now that getting non-employer insurance should be easier with the exchanges). I don’t find it surprising then, that, according to the NJ article, 81 percent of employers don’t anticipate dropping coverage. I think the other 19 percent will face some pretty severe backlash from employees unless they offer some sort of wage offset.

red_herring on August 29, 2013 at 1:01 PM

Schadenfreude on August 29, 2013 at 12:38 PM

Thank you Schad, I knew that was out there somewhere, but didn’t have time to look for it!

questionmark on August 29, 2013 at 1:03 PM

Why are they being “forced” by OCare to do it?

Strike 1 – Because the structure and provisions of ACA are shattering their cost models. ACA is not designed to be ‘business-friendly’ – it’s a progressive seizure / control of the marketplace to achieve a political end.

1. Forever 21 might just be using OCare for PR reasons – “It’s not our fault we have to cut your hours, it’s Obamas” In other words, I don’t think Forever 21 citing to OCare actually “proves” anything.

Strike 2. Can’t argue with an ideologue….they see their ideology only and are unwilling to see otherwise.

2. That being said, the trend in new jobs being part time is troubling. I think that’s a separate issue, though, than what I’ve been arguing (all else staying constant, employers can’t simply cut health benefits without increasing wages).

Strike 3. It’s not a separate issue. It’s directly linked to the provisions, rules, and structure of ACA. Employers can and have been cutting health benefits without increasing real wages because the costs caused by ACA are breaking their cost models. But that seems to be an ‘inconvenient truth’ (Forever 21 above) that you choose not to accept because it disproves your tripe.

Another question, and from me rhetorical as you’ve made it clear you’re an ideologue…

If this trend is a separate issue and not related to ACA – then why haven’t we seen this trend not only before in history during economic recoveries – but not even earlier in this economic ‘recovery’? What’s different besides ACA?

This trend didn’t start until 2012-2013 – when it was clear the ACA was going to happen.

Athos on August 29, 2013 at 1:08 PM

Affordable?

Aetna wanted $800+ per month for spouse & dependent insurance this year (That’s my cost, not the company’s), based on my salary. Socialism in healthcare now – the more you make the more you pay.

And cost my son $20,000 in medical bills this year (part time, no benefits). Affordable my a**

TerryW on August 29, 2013 at 1:09 PM

2. That being said, the trend in new jobs being part time is troubling. I think that’s a separate issue, though, than what I’ve been arguing (all else staying constant, employers can’t simply cut health benefits without increasing wages).

red_herring on August 29, 2013 at 12:40 PM

They aren’t merely “cutting” health benefits. They are cutting their own costs, with particular regard to the anticipated rise in costs that already are coming along with OCare.

Cut costs, or cut hours, or cut jobs, those are the choices.

Besides, OCare is supposed to supply all the health care needs, so why should businesses bear those costs if they don’t absolutely have to?

Besides, they’re not cutting employees health care, they are just saying you can’t get it thru us-the President has you covered.

questionmark on August 29, 2013 at 1:09 PM

Apt…. as would Frau Blücher.

[horses whinny]

hawkeye54 on August 29, 2013 at 11:46 AM

I vote, I say, I vote for the hen in the old Foghorn Leghorn cartoons.
You know the one with that ole rollin’ pin.

Flange on August 29, 2013 at 11:49 AM

Each a truly delightful and worthy consideration. :)

hawkeye54 on August 29, 2013 at 1:11 PM

Sorry for getting “besides” myself.

questionmark on August 29, 2013 at 1:11 PM

And cost my son $20,000 in medical bills this year (part time, no benefits). Affordable my a**

Affordable? It was never meant to be so. And one didn’t have to read any of the law to understand that. One only needed to look at who was advocating and promoting it, since when has any legislation foisted on the nation by the Left ever proved to have any true affordability, I’d like to know.

The name just sells well to the gullible uninformed and ignorant.

hawkeye54 on August 29, 2013 at 1:16 PM

Which “perfesser” would you recommend?

red_herring on August 29, 2013 at 12:30 PM

Or, better yet, if you wish to hear a passionate, accurate, grateful defense of capitalism and the free-market system, listen to Rush’s program today. I’m sure you can find replays somewhere for what you’ve already missed, but he is presenting The Institute for Advanced Conservative Studies ultimate lecture on the subject right now!

questionmark on August 29, 2013 at 1:30 PM

Red – but they can, and they are.

Zomcon JEM on August 29, 2013 at 1:35 PM

red_herring on August 29, 2013 at 12:40 PM

They aren’t merely “cutting” health benefits. They are cutting their own costs, with particular regard to the anticipated rise in costs that already are coming along with OCare.

Cut costs, or cut hours, or cut jobs, those are the choices.

Besides, OCare is supposed to supply all the health care needs, so why should businesses bear those costs if they don’t absolutely have to?

Besides, they’re not cutting employees health care, they are just saying you can’t get it thru us-the President has you covered.

questionmark on August 29, 2013 at 1:09 PM

An employer has to look at net employee costs, and for many that will mean cutting some FT to PT which will mean a savings. What is saved will be used to pay the higher costs they face for the FT employees that remain, due to Obamacare.

slickwillie2001 on August 29, 2013 at 1:41 PM

bayam! Please consult with your great-grandfather Paulie Krugman and tell us what we’re all missing here…

(Starts Squirrel-Powered Sundial)

Del Dolemonte on August 29, 2013 at 1:48 PM

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