Skip to comments.Surprise: Obamacare-wary employers not hiring, cutting hours
Posted on 01/03/2013 12:15:14 PM PST by SeekAndFind
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.
Just another way for 0bama to asphyxiate the private sector.. Forcing small businesses OUT of business. Soon the only job will be as a SLAVE to the government.
I am not a business owner, but I would assume excess cash is a trade off. One can hire more workers to get the job done, or one can invest in the productivity of current workers. With the cost of new workers now rising rapidly, I would think an employer would rather use their money to train CURRENT employees to make them more productive, and forgo adding to their staff levels.
The only people surprised by this are the people who wrote and passed the bill. :(
There is almost ZERO hiring...
reason number 1: Obamacare taxes and regulatory compliance costs
reason number 2: Obama’s new higher taxes just shoved down the throats of small businesses
reason number 3: many employers are also “psyched out” by all the anti-business rhetoric and “abuse” coming from Obama and his apparatchniks
expect more of same downwards-spiral for next 4 years.
the public voted for this depression/great recession type of economy so.... it appears we just have to get used to it
I appreciate their desire to Go Galt, but in the end this will fail.
The reason is we just don’t have enough people willing to drag their arse out of bed and go take a 20 hour per week near-minimum wage job when they can scam unemployment, welfare or SSI. (this was likely the very reason Obama dropped the work requirement for welfare).
Store up the road from me planned to hire 100 people and cut everyone’s hours. They were actually able to hire 17 who were willing to take the job (and I understand some of those have already moved on)
But look on the bright side. Hiring more part time workers will show a decrease in the unemployment numbers.
I’ve observed a few retailers cutting full time employees down to 20 hour weeks and hiring new part time employees.
“My fellow Americans... it is now clear that rich private business wishes to devastate the middle class by lay-offs and decreased work hours. I have therefore signed an executive order nationalizing such companies as we feel are guilty of such tactics in order to protect the middle class and the poor...”
What!? Increased taxes and regulation actually hurts the economy? Say it aint so!
“One can hire more workers to get the job done, or one can invest in the productivity of current workers.”
In many companies that have laid people off, they simply use “Plan C”: Force the remaining employees to do their own work, plus that of their laid-off co-workers, in order to keep their jobs. Over a year ago the Wall Street Journal highlighted the problems faced by those who survived layoffs; this was a big issue. People who used to work 9-5 are now working 9-7 (for the same pay).
“The reason is we just dont have enough people willing to drag their arse out of bed and go take a 20 hour per week near-minimum wage job when they can scam unemployment, welfare or SSI. (this was likely the very reason Obama dropped the work requirement for welfare).”
The nanny-state provides more than a 20 hour-per-week minimum-wage job; that is why immigrants (legal and otherwise) are imported to do them. Dropping the work requirement for welfare, while certainly a goal of President Foodstamps, was probably just acknoledging that you can’t force people to look for work that simply isn’t there.
Americans are slow to realize that “the new normal” is here to stay; unless you have some specific skills that are in demand, you will work for minimal sustenance (or not work at all). As companies figure out how to replace those workers with specific skills that are in demand (either importing Asian coolies to do it, or sending the work to Asia), those skilled workers will also fall off the map. This already happened with tech and finance, and will continue to spread.
my dtr's work has seen lots of layoffs, so has my sil's and so has my dil's...
I didn't see lots of presents bought this year...simple things....
just because they are the STATE CONTROLLED MEDIA doesn't mean they are truthful....
you might as well go on unemployment....at least you can stay home with the kids....
work is not valued anymore....its not a "reward" onto itself....infact,20 hrs at minimum wage is a punishment....(unless you are a kid or college age and just want that much work...otherwise, working families can not live on that)
Wait a minute. Is the article implying that central planning doesn’t work?
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I’m not surprised and good point.