Of course Obamacare is going to cause layoffs and shifts to part-time work. It raises the cost of health care coverage to businesses, and in some cases quite substantially. You guys are in complete denial as to the effect of this law, and you don’t want to admit that it might affect the economy adversely, so you’re just assuming that evil businessmen are taking advantage of this law to do evil things to their employees.
The hardest-hit industries are those that have small white-collar office staffs with health care, and much larger, low-paid service workers who either get minimal coverage or no coverage at all. Fast food chains are a perfect example of this.
Franchises warn that Obamacare could halve profits
Because health insurance costs a lot more than the penalties, a lot of businesses are going to opt for the penalties and drop their employee’s health insurance entirely. I mentioned this repeatedly back during the original Obamacare debates, and thought it was such a gaping loophole in the law that it must have been intentional - a backdoor way to get to single payer over time.
And if you think it’s just those evil businessmen…
Health care law brings double dose of trouble for part-time professors
Really people… Instead of just denying that this is happening, why don’t you just take the extraordinary step of googling “Obamacare layoffs”? There are plenty of stories out there, and from reputable sources.
Michigan company plans Obamacare layoffs
This set of layoffs isn’t due to health insurance coverage requirements, but to an astoundingly stupid part of the plan: part of the revenue raised to offset the cost of Obamacare comes from a new tax on medical device manufacturers. Got that? To help lower the cost of health care, the government is putting a new tax on the companies that provide health care services. Only the federal government could be this stupid. Last year another medical device manufacturer moved its operations out of the country because of the tax.
The additional costs of Obamacare are not trivial. One franchise said that its accountants estimate that Obamacare will result in a cost increase of $72,000 per year per location. Trust me - as someone who has been involved with a franchise in the past, $72,000 per year is often more than the franchise owner earns. Many of these franchises will go through flips and twists to avoid this, even if it means laying off employees, switching to part-time workers only, or investing in automation.
Consider this: A minimum-wage full-time employee in the U.S. earns about $13, 000 per year. Providing health insurance coverage for that person amounts to a 50% pay increase. There is no way businesses can absorb that. So they’re going to pay the penalty instead, but even that amounts to a 15% pay increase. That means that any worker whose is on the marginal productivity line is at risk of being laid off or converted into a part-time worker.
This is just the tip of the iceberg. A lot of the health care act hasn’t even been written into final legislation yet by the bureaucracy. Wait until the end of the first year of implementation, and then we’ll see just how much damage it’s done.