How ObamaCare will keep unemployment high
Suppose that a firm with 49 employees does not provide health benefits. Hiring one more worker will trigger the mandate. The company would now have to provide insurance coverage to all 50 workers or pay a tax penalty.
In New York, the average employer contribution for employer-provided insurance plans, runs from $4,567 for an individual to $ 12,748 for a family. Many companies will likely choose to pay the penalty instead, which is still expensive — $2,000 per worker multiplied by the entire workforce, after subtracting the statutory exemption for the first 30 workers. For a 50-person company, then, the tax would be $40,000, or $2,000 times 20.
That might not seem like a lot, but for many small businesses that could be the difference between survival and failure.
Under the circumstances, how likely is the company to hire that 50th worker? Or, if a company already has 50 workers, isn’t the company likely to lay off one employee? Or cut hours and make some employees part time, thus getting under the 50 employee cap?
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Feature, not a bug.
Washington Nearsider on November 19, 2012 at 10:32 AM
Every company in America will do this one. Is the simplest, least costly solution.
And it equals stagnation and zero growth, especially for young inexperienced workers.
This is intentional, as it then sets an entire generation dependent on government handouts.
Difficultas_Est_Imperium on November 19, 2012 at 10:34 AM
Silly. It’ll increase employment.
If a company has 49 workers – you reduce their hours to part-time, and hire more part-time workers to offset the lost labor hours.
Voila! More employment. /
Hill60 on November 19, 2012 at 10:34 AM
Common sense which is lacking from current admin AND 51% of the voters. Reap what you sow beeches
Bensonofben on November 19, 2012 at 10:34 AM
Obama voters remind me a bit of Charlie Sheen:
“Winning!”
beatcanvas on November 19, 2012 at 10:37 AM
What’s going to happen when the feds raise the penalty for businesses, which we know they will. The penalty for individuals without health insurance is already expected to go from about $100 in 2014 to about $700 in 2016. If it’s going to increase that much for individuals, I’m afraid to even guess what the penalty will be for businesses a few years down the road.
sydneyjane on November 19, 2012 at 10:38 AM
This. +100.
platypus on November 19, 2012 at 10:38 AM
The 49 employees is a minor point. There are a dozen ways it will keep unemployment high.
Let me count the ways.
Paul-Cincy on November 19, 2012 at 10:39 AM
How long before it becomes illegal to fire someone without cutting your own salary first?
WisCon on November 19, 2012 at 10:44 AM
Brilliant. Then we’ll have small businesses across the country simply close up shop instead of dealing with this bureaucratic nightmare.
Doughboy on November 19, 2012 at 10:52 AM
Most gaps like these tend to be smoothed out eventually because they’re politically untenable, which in this case probably either means exempting the first 50 employees or, uh, dropping the coverage mandate from 50 to 30. *shudder*
theperfecteconomist on November 19, 2012 at 10:56 AM
I believe the figures cited above are deemed “cadallac” plans, meaning,there will be an additional tax on them, unless the employer cuts back coverage. So, they screw you no matter what.
Blake on November 19, 2012 at 10:57 AM
If only somebody mentioned this three years ago….oh wait.
NeoKong on November 19, 2012 at 11:01 AM
I’m sure John Roberts has no trouble sleeping at night, knowing that he literally changed the course of a nation and condemned thousands to the unemployment line and premature death (compliments of the death panels).
TxAnn56 on November 19, 2012 at 11:16 AM
Being down 800,000 jobs is bad enough but that isn’t the whole story. It’s also about the fact that full-time employment will become a rare commodity and now where people might have worked one full-time job they’ll be forced to work 2 or 3 part-time jobs to make ends meet and even part-time jobs will be hard to come by bcuz everyone will be competing for them and when it comes to jobs it has the effect of more supply and less demand and in this case will drive the price–salary–down. And for a short while longer I guess fed gubmint workers, teachers and other public employees will have their plum union full-time jobs with full benefits until tax revenues drop so significantly that they’ll be lucky to meet da’ gubmint payrolls.
stukinIL4now on November 19, 2012 at 11:55 AM
I don’t see how cause/effect doesn’t crush most of 0Care in the end.
Yeah, they system we know will no longer be, but the lawsuits have already begun on the larger theoretical issues.
So consider what happens upon application.
Hell, we can’t even get there without dozens of waivers and delays.
IMO, 0Care ends up being more a insurance issue, which we all would have supported, and a lot of the fangs either never sprout, or are pulled out state-by-state, lawsuit-by-lawsuit.
Consider: If we see a real and honest doctor shortage, one that is more than quantifiable, the blowback occurs on the progs lumpen base, first. If they suck it up, and settle for RN’s in WalMart’s, then they’ve reaped what they’ve sown.
I may personally think it’s sad, but the apostles never asked Christ, “But what if they don’t want to learn how to fish”?
budfox on November 19, 2012 at 12:00 PM
I agree with a lot of that.
What’s always confused me, is how Barry could put this forth while complicating the crap out of entrepreneurship.
I mean, I know why – god forbid if you foster individualism – but he could have sailed on most of his programs if he leveraged them against huge breaks for startups on all levels.
budfox on November 19, 2012 at 12:04 PM
All part of the plan – but it really doesn’t matter – “President for Life” B. Hussein’O will take care of everything.
Pork-Chop on November 19, 2012 at 12:58 PM