The conservativeblogs are ablaze with claims that Obamacare is causing layoffs and increasing - even doubling - the cost of health insurance premiums. Dozens of layoffs here, hundreds there, thousands over yonder. The main stream media is curiously silent about this news.
Something’s wrong here. Either the conservative bloggers are making stuff up :eek:, or the MSM is as evil as they say.
So what’s going on here? Is Obamacare really triggering mass layoffs? If so, why now? The parts of the bill are being phased in, so what has happened recently to cause the layoffs? In particular, what sections of the bill will or MIGHT cause businesses, especially small businesses, to layoff employees?
My company recently laid off a number of people. Part of the reason given was Obamacare, though they didn’t use that phrase. Management said that lower income and an increase in the cost of benefits were the cause. I don’t see the budget numbers but I do talk to the upper management quite often. The management is very concerned about the additional costs. ‘Fucked’ is the word I’ve heard the most.
For the record, the owners work very hard to keep people on. For example, they bought another business, tore it down and built a new one. During the year the business was closed they kept all the original staff on and paid them %80 of their original salary even though the staff didn’t work. Also the owners are continually looking to expand and hire more staff.
The mood of the management isn’t very bright. The economy and uncertainty about costs has them pretty edgy.
The Papa John’s layoffs got a lot of coverage. Maybe that doesn’t count because some of that coverage was skeptical of the company’s math and its reasoning. Let’s not kid ourselves: CEOs are happy to use the law as a scapegoat and people who opposed the law in the first place are happy to let them. Meanwhile the economy keeps adding jobs.
Obama was re-elected. The law was passed two and a half years ago and the Supreme Court upheld it about six months ago and there was no particularly clear path to getting rid of it if Obama had lost, but some of these CEOs would have you believe they were not planning ahead. Because if there’s one thing good businessmen don’t do, it’s plan ahead.
The $2,000 fine levied on employers who do not offer “minimum essential coverage” to full time workers will probably result in some (mostly retail and food service) employers trimming workers’ hours. However, the law includes a “full time equivalence” provision that makes this harder than people like John Schnatter are claiming.
Some companies may have laid off workers in response to the election, but I have to think that broader economic concerns override these relatively small numbers.
We will see it pretty clearly in the monthly unemployment numbers over the next, say, 6 months or so. I imagine that conditions in Europe and the resolution (or not) of the fiscal cliff will have a much greater impact than the fact that Obamacare is now almost certainly not going to be repealed.
That, and the reality that costs are still going up **before **many changes from the health care law are on line, shows that the layoffs (based on higher health care costs) were expected to happen even with no reforms going on, the health care reform is the perfect scapegoat for many industries to use to deflect blame for the layoffs when other reasons (many that the reform aims to deal with) are to blame.
If you wanted to get a coherent argument, it would probably be:
Obamacare burdens employers in productive industries (like pizza making) who have to then downsize.
The revenue transfer generated by that burden goes to gubmint, where workers are more expensive and less efficient than the private sector.
There is a net loss of jobs, and especially of productive ones. The jobs that Obamacare creates (in both public and private sector) are deadweight which don’t actually make healthcare any more effective or efficient. They’re the equivalent of digging holes and filling them in.
In no way do I endorse what I just wrote. I’m just trying to get inside Republicans’ heads.
[Quote]
(http://www.cbo.gov/publication/43702)
H.R. 1206 would amend current law to exclude compensation paid to insurance agents and brokers from the administrative expenses used to determine the calculation of the medical loss ratio (MLR) for health insurance plans.
So much for controlling healthcare costs and reducing inefficiencies. :smack:
I already wrote my worthless state Representatives expressing my outrage here.
How do you explain mega Canadian automotive engine & transmission components manufactures like Magna & Linamar, who, year after year, are adding employees & new contracts with GM, Ford, Chrysler, Volvo, CAT & Cummings? The same parts were once machined and sub-assembled in USA plants.
These same two companies are opening new plants in the USA as well, and hiring…and having record profits. Both are non-union, and pay is about the same as the new tier of new hires at the Big 3 (mid to upper teens $ per hour - not the 27 to 38 per hour of UAW days - which Chrysler still pays to its grandfathered UAW workers).
Canada has national health care.
PS I have seen many USA, Tier 2, big 3 fortune 500 suppliers close shop and send the work to China (pre-Obama years), when the USA workers were making less than the Canadians pay their USA staff. Many were newer plants with newer capital equipment machines, and top quality…but they still opted to close them and send the work to China & other Asian countries, even when quality was not initially up to par.
Purely ancedotal, but my employer, a very large company in the energy sector, requires annual re-enrollment in their health care program. This year, one single component of the program has gone up by about $1.50 per pay period; everything else remains the same coverage, rates and dollar amounts as last year. I
I’d therefore be interested to see some actual evidence of these drastically increased health care costs that are supposedly driving layoffs elsewhere in the economy.
How is it ObamaCare can be causing layoffs in the USA, when Canadian firms are making the same industrial parts once made in the USA, given that Canada has nationalized health care?
Wouldn’t the Canadians being laying off workers as well, if nationalized health care was the root cause?
Another ‘purely anecdotal’ take, my dad’s former company isn’t planning any layoffs…but they are considering their options wrt either upping the employees percentage towards healthcare or even dropping healthcare completely and just paying the penalty (as well as several other options). They are going over the numbers right now trying to see what works best. On the one hand, they really want to do right by the employees, and more practically, want to retain staff, especially on contracts. On the other hand, a lot of their contracts are fixed fee for multiple years, and since all of them were competitive bid that means they only have so much margin to work with. If their costs go up, as they will, their margins shrink. Since they are a small business competing against large (often Fortune 500) companies who can afford to either have razor thin margins or even to take a loss to gain a key contract, it’s getting tougher and tougher to make things balance out. My dad sold out and retired at what looks like the optimal time.
From my perspective as a government worker, I know that things are tight with our own budget, but I’ve heard nothing about layoffs or even furloughs or cutting hours, and I haven’t heard any of the city or counties in the state planning any of that either. The state actually picked up the increase we were all supposed to pay in health care (and retirement), so though we didn’t get a raise (something a lot of folks are grumbling about since it’s been a long, long time since the last one), I know from meetings with the finance folks that it would have been a lot uglier if not only didn’t we get a raise but had to pay an additional 3% for retirement and 2-4% additional for health care. :eek:
Health care and insurance costs have been rising for years and years. Employers have been fiddling with the ratios of Employer paid vs Employee paid portions for years and years. In one respect, Obamacare jumped on an already moving train. Blaming Obamacare for increasing Employees paid portion is ignoring history.
An employer dropping coverage altogether better be ready to bump up pay to offset - sadly I fear that many employers will not, thereby ripping off their employees.
However that plays out, an employer dropping coverage will be pushing their employees into the new state or federal insurance exchanges, which will have the result of strengthening the exchanges as an alternative to commercial insurance. Thereby moving us one step closer to a universal healthcare model. Ta da!
Yeah, blaming Obamacare is a convenient excuse at best, and probably nothing but posturing for the freeper rubes who lap this nonsense up.
And if they believe costs from Obamacare will cause direct layoffs, do they also think raises in executive pay cause layoffs too? Particularly raises taken after a company posts losses, like those which recently occurred at a certain snack-cake company the right loves to cite when it pillories unions.
It’s true that they have been going up for years, but at least according to the finance folks at my dads old company, this MIGHT (since no one knows yet the full extent) be outside of their projections. Thus the need to look at the various options they have, and start planning for contingencies.
Consider that, IIRC, they will have to pay something like $2k/month per employee in penalties I don’t think they will be giving raises to go along with it, except that employees won’t have to pay their current part towards the current health care, which will save them a couple hundred bucks a month…sort of like a raise, except they would then have to buy health care. Like I said, this is just one option…another they are looking at is changing it from 85/15 (the current ratio the company is paying) to something like 75/25 (or maybe even 70/30). My WAG sitting in shoot the shit sessions with the finance and big wig types of the company is they will go with that, even though it means the employees will take a hit on their take home pay (the company will too btw…this ain’t simply shifting costs to the employees so that they can keep fat margins). They will do whatever is the least disruptive but still gives them some profit.
I guess we’ll see how it plays out. Here’s hoping there are happy endings in all of this.
The difference is that Canadian employers don’t pay for their employees’ Medicare. Medicare is funded entirely through general tax revenue. The Canadian system actually gives a competitive advantage to Canadian employers who compete with American companies, since their payroll costs are lower than their American competitors.