Green Room

Surprise: Obamacare-wary employers not hiring, cutting hours

posted at 1:16 pm on January 3, 2013 by

The real knife twist in this USA Today piece is the money quote from Mark Zandi, The One’s go-to “independent” economist:

Many businesses plan to bring on more part-time workers next year, trim the hours of full-time employees or curtail hiring because of the new health care law, human resource firms say. Their actions could further dampen job growth, which already is threatened by possible federal budget cutbacks resulting from the tax increases and spending cuts known as the fiscal cliff. “It will have a negative impact on job creation” in 2013, says Mark Zandi, chief economist of Moody’s Analytics…The so-called employer mandate to offer health coverage doesn’t take effect until Jan. 1, 2014. But to determine whether employees work enough hours on average to receive benefits, employers must track their schedules for three to 12 months prior to 2014 — meaning many are restructuring payrolls now or will do so early next year.

How widespread will the fallout be?  Very:

About a quarter of businesses surveyed by consulting firm Mercer don’t offer health coverage to employees who work at least 30 hours a week. Half of them plan to make changes so fewer employees work that many hours. The health care law will particularly affect companies with 40 to 45 workers that plan to expand and hire. Many are holding off so they don’t cross the 50-employee threshold, says Christine Ippolito, principal at Compass Workforce Solutions, a human resource consulting firm in Melville, N.Y. Ernie Canadeo, president of EGC Group, a Melville-based advertising and marketing agency with 45 employees, planned to add 10 next year but now says he may add fewer so he’s not subject to the mandate…Others already over the 50-employee threshold plan to add more part-time workers or cut the hours of full-timers, says Rob Wilson, head of Employco, a human resource outsourcing firm. Many, he says, will hire more temporary workers, whom they won’t have to cover.

Nearly half of retailers, restaurants and hotels will be affected by the law, according to Mercer. They employ large numbers of part-time and seasonal employees, including many who work about 30 hours a week. Since such low-wage workers are widely available, it often hasn’t been cost-effective or necessary for employers to offer them coverage. Providing them benefits could be costly because employees must pay no more than 9.5% of their wages in insurance premiums, forcing employers to contribute significantly more than they do for higher-wage workers. “I think you may see employees with fewer hours as a consequence,” says Neil Trautwein, vice president of the National Retail Federation.

So the law sets an arbitrary cap on the percentage of wages workers are permitted to contribute to their health benefits — the initial intent of which, presumably, was to compel employers to shell out to help cover more employees.  But instead of complying with the mandate and spending money they either (a) don’t have or (b) need for other purposes, cash-strapped small business owners are planning to shave hours and provide less work for their employees.  That’s not greed; it’s business reality in a stagnant economy.  The clumsy and meddlesome heavy hand of Big Government strikes again, hurting many of very the people it set out to “help.”  None of this should surprise anyone, of course.  Obamacare opponents have long argued that this project would spike spending and debt, deprive Americans of liberty, and destroy jobs.  These predictions are being vindicated with each passing day, hence the law’s enduring unpopularity.  And as the article notes, many of the most onerous mandates don’t cycle in until 2014, so the pain is just beginning.  For what it’s worth, the CBO has estimated that the president’s signature legislative accomplishment will kill 800,000 jobs.

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And remember: those employees whose hours are shaved below 30 will still somehow have to meet their individual mandate requirement. So their income will be reduced significantly even as the government hoists this huge burden on their backs.

What a horror show this is.

Kensington on January 3, 2013 at 1:43 PM

The clumsy surgical and meddlesome heavy hand of Big Government strikes again

All according to plan.

Kataklysmic on January 3, 2013 at 1:47 PM

I fully expect all this to blamed on Bush since Obama could be eating kittens on live tv and his dumbass voters would still think he’s wonderful.

gsherin on January 3, 2013 at 1:51 PM

Kensington, some of those people will qualify for the subsidies — but that price tag will likely rise as a result. Thus, more spending and more unpaid-for spending.

Guy Benson on January 3, 2013 at 1:56 PM

I may be wrong, but it was my understanding that the 9.5% was on the household income, not the employee income. So the employer needs to know the household income of each employee.

AndrewsDad on January 3, 2013 at 1:59 PM

War on Women!!!

Cause basically, the majority of jobs that may open up will be part-time only… So single women and single moms who are the sole income earners are out of luck. Full time work will be a luxury.

FUBO!

lucyvanpelt on January 3, 2013 at 2:07 PM

Unintended consequences….

Steve Eggleston on January 3, 2013 at 2:41 PM

What a horror show this is.

Kensington on January 3, 2013 at 1:43 PM

What’s worse is that the employee mandate depends upon what union and or state you live in, or work in.

Isn’t there an amendment about equal protection or something? /sarc

dogsoldier on January 3, 2013 at 2:53 PM

You reap what you sow.

RSbrewer on January 3, 2013 at 2:55 PM

lucyvanpelt on January 3, 2013 at 2:07 PM

W2 contract jobs too. I’ve been hearing about quite a few of these. Short term, no vacation, no holiday pay, and no insurance. A few offer stupidly expensive insurance. Apparently temp agencies aren’t capped to the 9.5%, so expect a lot more of that.

dogsoldier on January 3, 2013 at 2:58 PM

Yep. Our company converted about half our workforce from salary to hourly in anticipation of this. (We are a healthcare company and our President understands the new healthcare law because she actually read it!)

Next step… dropping hours under 30/week…

dominigan on January 3, 2013 at 3:14 PM

dogsoldier on January 3, 2013 at 2:58 PM

Yes, I have seen that already too. I am currently working where I had to take a pretty sizable pay cut (like so many folks). I continue to look for better opportunities, but they all have been contract… 6 month-1 year stints. Being single, I can’t commit to any of those. Need stable income.

lucyvanpelt on January 3, 2013 at 3:25 PM

Forward!

UltimateBob on January 3, 2013 at 3:27 PM

Sorry! Got my quote function backwards!

dogsoldier on January 3, 2013 at 2:58 PM

Yes, I have seen that already too. I am currently working where I had to take a pretty sizable pay cut (like so many folks). I continue to look for better opportunities, but they all have been contract… 6 month-1 year stints. Being single, I can’t commit to any of those. Need stable income.

lucyvanpelt on January 3, 2013 at 3:28 PM

so fulltimers will be turned into parttimers and hours cut to less than 30 a week and will be forced into the individual mandate…suckers, that’s what you get for voting with your crotch…I’ve no sympathy for any of them…

RedInMD on January 3, 2013 at 3:33 PM

We have politicians who wouldn’t know a business if they tripped over one writing laws for business owners. Remember when the politicians in NYC put a high tax on millionaires and they moved out of the city, Rush, among them and when they totaled up their tax revenues they were seriously lacking because they did move out like they promised and to add insult to injury the politicians had already spent the money they thought their new tax law would provide.

mixplix on January 3, 2013 at 3:38 PM

so fulltimers will be turned into parttimers and hours cut to less than 30 a week and will be forced into the individual mandate…suckers, that’s what you get for voting with your crotch…I’ve no sympathy for any of them…

RedInMD on January 3, 2013 at 3:33 PM

Yeah, well just make sure your schadenfreude is aimed at Obama supporters, because some of us who are boned under this particular scenario aren’t Obama supporters.

Kensington on January 3, 2013 at 3:59 PM

I can’t commit to any of those. Need stable income.

lucyvanpelt on January 3, 2013 at 3:28 PM

Unfortunately, that whole “stable income” thing is rapidly becoming a thing of the past.

dogsoldier on January 3, 2013 at 4:11 PM

Obama: “I’m set for life. What do I care?”

The Rogue Tomato on January 3, 2013 at 4:11 PM

The worst of this is going to hit right as the 2014 midterm elections get going. A nightmare for every Democrat who voted for it.

rockmom on January 3, 2013 at 4:12 PM

Obama: Every DC politician: “I’m set for life. What do I care?”

The Rogue Tomato on January 3, 2013 at 4:11 PM

CurtZHP on January 3, 2013 at 4:25 PM

The worst of this is going to hit right as the 2014 midterm elections get going. A nightmare for every Democrat who voted for it.

rockmom on January 3, 2013 at 4:12 PM

Democrats could, at this point, get caught raping kittens and they’d still get reelected as long as there’s a check in it for the voters. This country is that far gone.

SAMinVA on January 3, 2013 at 4:27 PM

The worst of this is going to hit right as the 2014 midterm elections get going. A nightmare for every Democrat who voted for it.

rockmom on January 3, 2013 at 4:12 PM

Oh, nonsense. All they’ll have to do is blame the GOP, and the dummies will believe them.

The Democrats retake the House in 2014. Bet on it.

Kensington on January 3, 2013 at 4:32 PM

The video on that last link has been killed. Full story at
http://cnsnews.com/news/article/cbo-obamacare-will-kill-800000-jobs-over-decade

We were warned. This is why so many European countries have precious few businesses with more than 50 people, they learned to play the game a long time ago. How are things in the European economy these days? It’s what we have to look forward to.

iurockhead on January 3, 2013 at 4:45 PM

Democrats could, at this point, get caught raping kittens and they’d still get reelected as long as there’s a check in it for the voters. This country is that far gone.

SAMinVA on January 3, 2013 at 4:27 PM

At some point, the checks will stop. They will have to.

Get ready for the mayhem……….

iurockhead on January 3, 2013 at 4:47 PM

somebody alluded to it above but cutting the work week to avoid ObamaCare has a few more dominoes…depending on the plan, might be no 401K in a time when that might be the only retirement plan they have left…paid holidays/vacation???

my oh my…

teejk on January 3, 2013 at 5:57 PM

DAMN FREE HEALTH CARE IS AWESOME See I told ya so wingnuts~!

tom daschle concerned on January 3, 2013 at 6:31 PM

Now some people will have to get two part time jobs instead of one full time job.

And quality will suffer.

But hey…according to plan…Cloward & Piven are proud of their lil’ Obama

ProfShadow on January 3, 2013 at 7:56 PM

Of course Obama’s not a douche nozzle.

DevilsPrinciple on January 3, 2013 at 8:20 PM

Freak.

Bmore on January 3, 2013 at 9:37 PM

and make sure and remind every Barky voter who complains about the mandate they own this douche nozzle…

hillsoftx on January 3, 2013 at 9:48 PM

W2 contract jobs too. I’ve been hearing about quite a few of these. Short term, no vacation, no holiday pay, and no insurance. A few offer stupidly expensive insurance. Apparently temp agencies aren’t capped to the 9.5%, so expect a lot more of that.

After 20 months and over 450 job applications that’s what I finally got. Under the circumstances I’m very grateful to have it too.
I hate leftists with the white hot fury of a thousand suns.

single stack on January 4, 2013 at 1:24 AM

single stack on January 4, 2013 at 1:24 AM

You’re not alone.

dogsoldier on January 4, 2013 at 7:33 AM

The Democrats retake the House in 2014. Bet on it.

Kensington on January 3, 2013 at 4:32 PM

Haven’t they already? Look at the last few days for example. You see any conservatism going on there? Did they impeach Holder? Have they actually found anyone guilty of stealing stimulus money, like Maxine Waters?

We are governed by out of control, corrupt aristocrats.

dogsoldier on January 4, 2013 at 7:38 AM

This isn’t exactly on topic, but it fits in with all the craziness.
We received my husbands first paycheck of 2013 yesterday. Between new SS deductions and higher health insurance premiums, his take home is now $30 lighter per week! With a total household of 8 people with our combined incomes that don’t even make ends meet anymore, this is painful. The worst part is, it’s only the beginning. It is disheartening to see the worry in my husbands eyes as all this reality is setting in.

redlucy on January 4, 2013 at 7:52 AM

dogsoldier on January 4, 2013 at 7:33 AM

Just waiting for the balloon to go up. Looking forward to it, actually.

single stack on January 4, 2013 at 8:30 AM

redlucy on January 4, 2013 at 7:52 AM

I hope you see why using “temporary” tax breaks are dangerous. With time people tend to see the lower amount as the “base” and forget about the “temporary”. So when the break expires, they view it as a tax increase.

No need to get into whether FICA rates are fair. They are set to try to keep water in the leaky bucket.

teejk on January 4, 2013 at 8:48 AM

Whatever. They voted for this. Let them eat it.

southernms on January 4, 2013 at 11:05 AM

I fully expect all this to blamed on Bush since Obama could be eating kittens on live tv and his dumbass voters would still think he’s wonderful.

gsherin on January 3, 2013 at 1:51 PM

Not only that, a good portion of the country would start eating kittens as well.

PastorJon on January 4, 2013 at 11:20 AM

Crash this thing and get it over with.

I hate to say it, but the patient that is the US is too sick to survive the status quo. I don’t know what the other side looks like, but we really have no choice but to find out.

bbhack on January 4, 2013 at 11:31 AM

I have checked with several alternate universe websites and there is nothing regarding any of these comments. There are no tax increases in effect for the common folk. Obviously many of you are ill informed./

CW20 on January 4, 2013 at 12:07 PM