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Will Obamacare Cost You Your Job?
Townhall.com ^ | July 26, 2014 | John C. Goodman

Posted on 07/26/2014 4:46:17 AM PDT by Kaslin

Why is our recovery from the Great Recession so sluggish and so slow?

Economists are increasingly focusing on Barack Obama’s signature legislative accomplishment: the Affordable Care Act, popularly known as ObamaCare. Although generally thought of as a measure to insure the uninsured, health reform is affecting the entire labor market in negative ways.

As I wrote previously, the employer mandate to provide health insurance will cost almost $6 an hour for family coverage. This health minimum wage (on top of the money minimum wage) raises the cost of labor and will almost certainly discourage hiring.

There are two ways that employers can get around it: stay small and employ part-time rather than full-time employees.

The employer mandate, which kicks in in about a year and a half, doesn’t apply to firms with fewer than 50 employees. Suppose an employer has 49 low-wage workers. Because these workers can get highly subsidized health insurance in the (ObamaCare) exchange, they don’t want health insurance from the employer. They would rather have the cash equivalent in the form of higher wages. Now suppose the employer hires one more worker. Not providing health insurance at this point subjects the employer to a $2,000 fine for each employee.

Bottom line: hiring one more worker will cost this firm $100,000.

The mandate also doesn’t apply to employees who work fewer than 30 hours per week. To continue with the above example, if instead of hiring a 50th full time worker, the employer hired two part-time workers he would avoid the requirement to provide health insurance or pay $100,000 in fines.

For firms that have already exceeded the 50 worker threshold, every time they reduce the hours of an employee below 30 they avoid the requirement to provide costly health insurance or pay a $2,000 fine. Moreover, the economic incentive to work fewer hours affects employees as well as their employers. University of Chicago economist Casey Mulligan estimates that there are about 4 million workers who would be better off switching to part-time work. Once they reduce their hours, they are no longer eligible for their employer’s health plan. After that, they are entitled to generous subsidies in the health insurance exchange. And the subsidies in the exchange are greater than the lost wages.

Writing in the Wall Street Journal the other day, Mort Zuckerman said:

Most people will have the impression that the 288,000 jobs created last month were full-time. Not so…. Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million….

There is another way in which ObamaCare discourages work. For low-income families, the federal government is paying more than 90% of the cost of health insurance purchased in the exchanges. But that subsidy drops quickly as income rises and disappears completely at four times the poverty level ($46,680 for an individual and $95,400) for a family of four).

So when people earn higher incomes, they not only pay higher income and payroll taxes, they also lose subsidy dollars as well. In fact, because of peculiar quirks in the formula, a family can lose $10,000 or more in subsidies by earning just one more dollar of income.

When loss of health insurance subsides is added to income and payroll tax rates the net effect is quite high – even for the average family. In fact, Casey Mulligan estimates that ObamaCare imposes the third largest increase in marginal tax rates in the past 70 years, lowering the return from working by 10%. As Harvard economics professor Greg Mankiw explains, that implies a long term loss to the economy on the order of 5% of GDP – or more than $800 billion a year at current prices. That’s about four times the size of the direct ObamaCare spending.

This indirect cost to the economy equals more than $8,000 per household per year.


TOPICS: Culture/Society; Government
KEYWORDS: 0bamacare; barack0bama; greatrecession; healthinsurance; taxrates; unaffordablecareact

1 posted on 07/26/2014 4:46:17 AM PDT by Kaslin
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To: Kaslin

Obama has single-handedly brought this country to its ruin. Open borders and Obamacare have robbed this nation of its ecomomy. Obama has done it all. Obama has achieved his goal of bringing this nation down.


2 posted on 07/26/2014 4:52:53 AM PDT by abclily
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To: Kaslin

Sequestration already cost my job and essentially wiped out the market for my skills. Obama has fundamentally transformed America into a Soviet disaster.


3 posted on 07/26/2014 4:58:44 AM PDT by Gen.Blather
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To: Kaslin
Well, at least these 30 million without medical insurance now have coverage thanks to Obamacare...

I can sleep well at night in my homeless shelter knowing this...

/ sarcasm

Disclaimer: I am not in a homeless shelter... just slowly going broke because my health insurance premiums went up $2,000 a year and my wifes hours were cut to just over part time...

Redoing my household budget today to see where else I can cut to make ends meet...

4 posted on 07/26/2014 5:09:25 AM PDT by Popman ("Resistance to Tyrants is Obedience to God" - Thomas Jefferson)
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To: abclily

Well, he said that was what he was going to do. He never tried to hide it.

America could survive a Barack Obama, but it could not survive a citizenry that would elect him.


5 posted on 07/26/2014 5:13:14 AM PDT by ought-six ( Multiculturalism is national suicide, and political correctness is the cyanide capsule.)
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To: Kaslin

No matter what it costs, the American people still believe in the concept. Look at the primaries thus far, defenders of Obamacare have been particularly successful.


6 posted on 07/26/2014 5:18:29 AM PDT by Theodore R. (Liberals keep winning; so the American people must now be all-liberal all the time.)
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To: Gen.Blather

Your experience is not that of the Obama supporters though, and they are still hopeful about what Orrin G. Hatch’s friend EMK was always calling “the dream goes on.”


7 posted on 07/26/2014 5:19:51 AM PDT by Theodore R. (Liberals keep winning; so the American people must now be all-liberal all the time.)
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To: Kaslin

My husband lost his job directly due to BOcare. And while he’s got a few odd jobs, he still hasn’t been ale to replace to job he lost. Lean times at the Kitty house

Thanks, BO for helping us out of the middle class and into poverty.


8 posted on 07/26/2014 5:20:23 AM PDT by KosmicKitty (WARNING: Hormonally crazed woman ahead!!)
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To: abclily

>> Obama has single-handedly brought this country to its ruin.

There were many complicit dirtbags in Congress voted into power by idiots thanks to the deviants in Media. Plus, Obama has the pen in his left hand, and the phone in his right.


9 posted on 07/26/2014 5:22:23 AM PDT by Gene Eric (Don't be a statist!)
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To: ought-six

I keep reminding people of that when the dems complain at work. I tell them to go to YouTube and look up his videos. It’s all the in the open. Unfortunately, few cared at the time. Some even thought it was a good thing. That was until they were impacted.

As our HR Dept rolled out the benefits changes, they stated clearly that the 17% increase on our premiums were directly due to Obamacare. Some were I’m such disbelief that they looked physically I’ll.


10 posted on 07/26/2014 5:24:56 AM PDT by Dutch Boy
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To: Dutch Boy
Unfortunately, few cared at the time. Some even thought it was a good thing. That was until they were impacted.

And they still don't care or continue to be ignorant of the fact that when the vile POS stated that he was "going to fundamentally transform the U.S.". What else would the jug-eared Marxist POS mean but "transform" the country into a third world craphole, and yet he continues unabated and without any political opposition from the limp-wristed Repukelicans.

11 posted on 07/26/2014 5:37:39 AM PDT by Common Sense 101 (Hey libs... If your theories fly in the face of reality, it's not reality that's wrong.)
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To: Kaslin; All

That, and Obama’s election (2008), have already done so, twice...

Corporate squishiness from that point on has been pegging the meter...You’d think they’d be a little more resistant...But noooooooo...

My job now is to try and take care of myself (health wise) as best I can, so I can stick around long enough to be a real big pain in the arse to the clear and present danger in this country...

My reward for this is not here on this earth...So, I’m good with it...

;-)


12 posted on 07/26/2014 5:39:07 AM PDT by stevie_d_64 (I will settle for a "perfectly good, gently used" kidney...Apply within...)
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To: ought-six

I don’t know if I would necessarily say that. I know there are plenty of quotes to prove this was what he was going to do. In my state, during his first campaign, if you were a dumb voter and only saw commercials, you would have assumed he was pro-American.


13 posted on 07/26/2014 5:42:12 AM PDT by CommieCutter ("For an idea to be too simplistic, it must first be proven wrong" --Thomas Sowell)
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To: Kaslin

So “economists” have just discovered that adding huge non-productive costs by fiat results in less of an activity? God forbid someone applies this radical new idea to government overall. It might endanger the high tax rates, excessive regulation, and coerced redistribution that impede economic enterprise.


14 posted on 07/26/2014 5:47:13 AM PDT by Chewbarkah
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To: Theodore R.
Obamacare has never polled a majority.

Pelosi lost the House because of Obamacare.

The rats would have lost the Senate if every rat had been up for reelection.

Twenty-eight states joined the lawsuit against Obamacare.

If pubbies cannot find the courage to denounce and demand repeal of the most harmful legislation in American history, there is zero chance they'll make other reforms necessary to restore our republic.

15 posted on 07/26/2014 5:59:57 AM PDT by Jacquerie (Article V. If not now, when?)
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To: Kaslin

Obama garnered most of the votes of “low information voters”, who are also more likely to hold jobs that require highly skilled workers. ObamaCare gives employers strong incentives to limit every position possible to part time status, and this means that at the lower-skilled level, as many jobs as possible will be shifted from full time to part time, with no “benefits”.

People who only can qualify for these jobs will find that there are few if any full time jobs. They will be forced to work multiple part time jobs, and forced to work more than 40 hours a week and will have less net pay because they will have to pay for higher commute costs and their own health insurance.

The poor are thus doubly exploited by the elite liberals they voted for.


16 posted on 07/26/2014 6:45:26 AM PDT by theBuckwheat
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To: Kaslin

Everything about Obama costs jobs and increases debt.


17 posted on 07/26/2014 6:47:40 AM PDT by Vaduz
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To: Kaslin

It won’t cost me my job, just my income. I’ll still be working,just not for pay....


18 posted on 07/26/2014 6:49:45 AM PDT by Mom MD
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To: Kaslin
This is just sickening. Obamacare costing full time jobs in AMERICA!

A sitting POTUS deliberately killing jobs without remorse or regret, and only for the purpose
of advancing the party Socialism/Agendas.

You get that America? You Dems voted this man into office, TWICE!

19 posted on 07/26/2014 6:52:52 AM PDT by MaxMax (Pay Attention and you'll be pissed off too! FIRE BOEHNER, NOW!)
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To: MaxMax

The uniformed aka idiot voters will never get it


20 posted on 07/26/2014 7:17:35 AM PDT by Kaslin (He needed the ignorant to reelect him, and he got them. Now we all have to pay the consequenses)
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To: Kaslin

“The uniformed aka idiot voters will never get it”

Isn’t that the truth, last night on BOR they repeated a bunch of Jessie Watters episodes where he asks citizens the most basic questions about the country’s history. Absolute dolts, and most of the morons were College Students. Just how the RAT party intended it to be, it’s all about feelings and not facts and common sense.


21 posted on 07/26/2014 7:42:49 AM PDT by DAC21
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To: Kaslin
They will when they lose their jobs, or the hours are cut back. Or their
Neighbor, Friends, Relatives, etc.. lose their jobs and their Homes too.

This impacts even the welfare scammers.

The economy may need to get worse for some to realize what's happening, but they will eventually.

22 posted on 07/26/2014 7:53:21 AM PDT by MaxMax (Pay Attention and you'll be pissed off too! FIRE BOEHNER, NOW!)
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To: MaxMax

The company I work at has fired thousands since 2009.
Did the writer just realize that obamacare was bad for everyone but the insiders?


23 posted on 07/26/2014 9:51:44 AM PDT by minnesota_bound
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To: Kaslin

bfl


24 posted on 07/26/2014 1:26:42 PM PDT by AllAmericanGirl44
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To: minnesota_bound

Yea, every article is newly discovered news to the Media it seems.


25 posted on 07/26/2014 1:43:27 PM PDT by MaxMax (Pay Attention and you'll be pissed off too! FIRE BOEHNER, NOW!)
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