Video: NY small business owner on expansion, job creation: “It’s just not worth it”
posted at 2:01 pm on February 27, 2014 by Ed Morrissey
Quick — someone check to see if the Koch Brothers have bought Time Warner Cable News! Harry Reid needs to know, after all, because all of these “horror stories” about ObamaCare are just lies. Actually, we may need to see if the Kochs have bought all of New York, because small-business owners are discovering that Reid’s law does anything but “bend the cost curve downward” (via Daniel Halper):
“Everything is on hold. We won’t grow. We won’t reach that threshold. It is not worth it for us,” says pet store owner Matt Sames.
The reporter adds, “He says he scrapped his plans because of the Affordable Care Act. Opening two more locations would increase his company’s employee size to 50, making it mandatory for him to provide health care for all his workers.”
“If we wouldn’t cover those 50 employees, I think there’s a $2,000 penalty per employee. So that is a $100,000 bill,” says the owner.
Yes, that’s what happens when one does the math on ObamaCare’s employer mandate. We’ve made this argument a number of times since the debate first began on this part of the ACA. In order for small businesses to grow past the 50-employee mark, the return on that staffing investment has to exceed not just the base compensation of those employees (as it always must), but also the added costs of either health insurance or a penalty for each existing employee as well. That provides a huge disincentive to expansion, so it’s hardly surprising that business owners are choosing to avoid the risks of expansion and job creation altogether and staying put at current size.
The rest of the small business owners in the clip are making the same point. The costs outweigh the risks in expansion now, so they’re not expanding. That means the economy won’t grow, jobs won’t be created, and investors will look for ways to protect their capital rather than put it to use. These are some of the same disincentives noted by the CBO in its projection that ObamaCare will result in a net decline of the equivalent of 2.5 million full-time jobs from what would have existed without the law over the next decade, which will result in a net decline of a trillion dollars in compensation.
This is the real job lock — the lock on innovation and expansion thanks to the heavy cost overhang of ObamaCare on small businesses, and business in general. But don’t tell Harry Reid, because math is un-American.
Update: More on Reid from my friend Peter Wehner at Commentary: “At least Joe McCarthy wasn’t majority leader.” Be sure to read it all, and then wait to see if the media covers Reid’s demagoguery with anything close to the same energy as the Ted Nugent story.