Skip to comments.Obamacare's War On Full-Time Jobs Will Sucker Punch Economy
Posted on 04/19/2013 11:35:00 AM PDT by blam
Obamacare's War On Full-Time Jobs Will Sucker Punch Economy
Politics / Employment
April 19, 2013 - 12:12 PM GMT
By: Money Morning
David Zeiler writes: Obamacare's rules regarding hours worked and employer-sponsored healthcare coverage have entire industries looking at cutting down on their number of full-time employees in favor of more part-time employees.
Large industries affected include hotels, restaurants and retailers, as well as small businesses of all stripes.
In essence, the hefty financial burden imposed by Obamacare for having too many full-time employees is creating a huge incentive for many employers to cut workers' hours, or, in some cases, avoid hiring altogether.
Tens of millions of American workers are at risk of being denied employer-sponsored health insurance as a result, and will end up with less pay to boot.
It could be a disaster for the still-lagging U.S. economy.
"If you want to have reduced work, lower wages and economic stagnation, this is a great way to do it," Ed Haislmaier, a senior research fellow at the Heritage Foundation, told FOX News.
How Obamacare Discourages Full-Time Jobs In trying to achieve the goal of having health insurance for all Americans, Obamacare - officially known as the Affordable Care Act - created specific requirements for employers.
The Obamacare law says that every employer that has 50 or more full-time employees must offer health insurance to anyone who qualifies as full-time, defined as anyone who works at least 30 hours a week.
Employers that fail to offer health insurance as required must pay a penalty of $2,000 per worker beyond the threshold of 30 employees. Yes, that means hire No. 50 isn't a $2,000 a year penalty - it's a $40,000 a year penalty.
Of course, every hire after that incurs another $2,000 a year, so adding more full-time employees in the absence of a health insurance plan can get very expensive.
Franchise industries (like fast-food and restaurant chains) and other small businesses often operate on thin profit margins - the net profit averages 3.5 %.
That's why such businesses have rarely offered healthcare benefits in the first place. They'll do whatever it takes to stay beneath the Obamacare thresholds.
"Many stores will have to cut worker hours out of necessity. It could be the difference between staying in business or going out of business," Stephen Caldeira, president of the International Franchise Association, told The Wall Street Journal.
Obamacare could cost the franchise industry $6.4 billion and put 3.2 million jobs at risk, according to a study done in 2011 by the Hudson Institute.
Meet Obamacare's "49ers" and "29ers" Many smaller companies have already started to limit hiring to 49 employees to avoid the Obamacare triggers, earning the nickname "49ers."
Meanwhile, service-oriented businesses are seeking to keep work weeks below 30 hours - the "29ers" - because they don't have to offer health insurance to part-time workers.
According to The Wall Street Journal, franchisees of Burger King, McDonald's, Red Lobster, KFC, Dunkin' Donuts and Taco Bell have all started to nudge employees into part-time hours.
They can't afford to wait until the law goes into effect Jan. 1 because Obamacare will base the status of employees on their work schedule in 2013.
Just this week, Regal Entertainment Group, which operates 500 movie houses in 38 states, said it has cut the schedule of thousands of employees to less than 30 hours a week. A company memo blamed the move on Obamacare.
Even some states have shifted their employment policies in response to the Obamacare requirements.
Earlier this year, Virginia Gov. Bob McDonnell told state agencies to reduce hours worked by part-time employees to less than 30 to avoid an estimated increase in annual health insurance costs to the state of $61 million to $110 million.
Lost Pay Will Damage U.S. Economy The biggest losers here, of course, are the millions of workers affected by these changes.
Their reduced hours will ensure that not only will they be denied employee-sponsored health insurance, they'll also be forced by law to buy health insurance from an Obamacare exchange or face financial penalties themselves.
Worst of all, the reduced hours will mean less pay.
The last thing workers making less-than-average wages need is a pay cut.
Equally concerning is the Obamacare-generated bias toward part-time workers, which we're already seeing.
According to Gallup, part-time jobs have risen from 17.6% of the labor force last July to 20.6% in February. That's an ominous trend.
A rising proportion of part-time workers making less money will put a new drag on the U.S. economy, 70% of which is driven by consumer spending.
When you add in the number of jobs that won't be created because of companies trying to stay below the 50-employee threshold, it's clear that Obamacare is going to be a hard pill for American workers to swallow.
"Democrats who thought they were doing workers a favor by mandating health coverage can't seem to understand that it doesn't help workers to give them healthcare if they can't get a full-time job that pays the rest of their bills," The Wall Street Journal observed in a recent editorial.
"Corporate increases our premiums 70% in one year. Executive blames Obamacare as a key factor."
The answer is mass non-compliance. All it take is for someone to organize it on social media. So far, no takers.
Most of the IT workers around the RTP/Raleigh area are temps. Everyone, save for a few suits, work as rootless contractors for 12/14 an hour. Most new hires are not regular employees since unemployed people are a cheap commodity here.
They are also predominantly Yankees who supported the Black Messiah.
I’m in for a big laugh at their expense.
They’d have to turn off the televised sports, first.
Then the 1%ers would come down on them like an avalanche. to make the point.
It’s a WAR ON THE PRIVATE SECTOR, while he ramps up Gov’t job hirings.. Pretty obvious what he’s trying to do. Make EVERYONE a gov’t employee, working for his regime.
It’s hard to not comply when the enforcement muscle is the IRS with their unlimited power. We can only hope that it will prove to be so unworkable that it will crash and burn under its own weight.
Obama is taking it up the shorts from the low-info crowd about this 29 hour deal. In the name of self-preservation he is going to have to make an example out of someone, and it ain’t gonna be pretty.
Laid off twice in last four years. Very few full-time jobs in my line of work. All contract. Scrounging a few jobs here and there.
Previously employed for 25 years.
What happened five years ago? < /duh>
Card-carrying Obamanation Journalists have used every excuse that they can spin to enable Tyrant B. Hussein Obama to continue to bypass Congress and destroy the US Constitution.
Our sorry Liberal Agenda Media, has proven to be a willing ally to Commie Obama by publishing gun ownership information in their sorry news outlets.
Confidential Gun Show background checklists are as confidential as the weakest link in the confidentiality chain, be it the sorry Freedom of Information Act, or a sorry Media outlet Editor.
The purpose of a confidentially armed America Citizenry is THE BEST DETERRENT to power grabs by Tyrants such as the current wannabe Tyrant B. Hussein Obama.
Thus, Government knowledge of private gun ownership is ILLEGAL because it is an infringement upon the 2nd Amendment.
Gun background checklists collected will be used to confiscate our anti-Tyrant guns whenever the present or future Tyrant chooses. Of course, that would happen ONLY when it is in the National Interest.
We need to stay focused!
DO NOT GET DISTRACTED!
Commie Obama has just begun to fight us!
With Communist-Style Communal Obamacare, B. Hussein already has one-sixth of the US Economy under his Communist heel.
Control of the US House in the 2014 National Election will clear the way for Commie Obama to take over the other five-sixth of the US Economy.
Most of the news from the Obamanation Administration centers around topics that are designed to be just another Obamanation Smokescreen to divert the attention away from Obama managing each new Constitutional Crisis into a Regulation that violates the Constitution.
Never let a Crisis go to waste, is the rule that guides Commie Obama.
Examples of these Obamanation distractions are most of the social issues that get attention by the Liberal Agenda Media.
Our sorry Congressional RINOs have been to stupid to learn this smoke and mirrors distraction game, and run from bargain to bargain or deal to deal, with nary a thought to use REGULAR ORDER, as designed by our Founding Fathers to protect us from Tyrants such as B. Hussein Obama.
If bargains and deals do not work then Arrogant, Incompetent, Communist Tyrant B. Hussein Obama will try to bypass the REGULAR ORDER of Congress by using Executive Orders, selective enforcement of REGULATIONS, and other Jack-Booted actions and verbal dictates that are consistent with the Communist Cell training that B. Hussein received in his quest to FUNDAMENTALLY CHANGE THE UNITED STATES OF AMERICA.
As any card-carrying Obamanation Journalist will tell you:
- - - We must support Obama - - - TO FUNDAMENTALLY CHANGE THE UNITED STATES OF AMERICA - - - into a totally Regulated Communist Obamanation of Debt and Doom.
After all, how else can - - - everyone get a fair shot? - - -
BTW, RECEIVING a fair shot would have been a lot easier if Commie Obama had succeeded in his personal recent attempted bipartisan destruction of the 2nd Amendment to disarm us - - - - .
The workaround to this is for companies to standardize on 20 hour part time work weeks with employees having two 20 hour per week jobs.
So if there’s a McDonalds and a Wendys right next to each other rather than having 40 full time workers each, they each have 80 part time workers, all of whom spend 20 hours at one then switch to working at the other for the other 20 hours. It’s an oversimplification, but does point out what will happen.
There’s no net loss in staff, no net loss in hours worked, no net loss in regular pay (overtime will be capped at 9 hours of course). There’ll be a big increase in HR and tax paperwork with double the amount of W2s, etc. By both the employer and employee.
Obama said back in 04 that the biggest thing in the way of “single payer” was that most Americans get health insurance through work and are happy with it. Step 1 of Obamacare is working as planned. Soon the system will be screwed up enough that “free government healthcare” will sound good to a majority.
This is probably why, as an industrial engineer, I’ve seen a huge increase in advertising for shift scheduling software. Scheduling on paper sheets isn’t good enough - managers want to make certain no one goes over 29 hours and have the records in a database to prove it.
Also sad is that the only thing saving many from being reduced to 29 hour shifts is that their employers fully expect the government to move the goal posts again and soon making the moves a waste.
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