Obamacare and Jobs: An Unhappy Tale
Oct 17, 2012 -
The story of Obamacare and jobs is unfolding, and it’s not a happy one. Last week, a large national restaurant chain with hundreds of Olive Garden and Red Lobster locations announced that it will need to cut back hours for part-time employees thanks to Obamacare’s regulations.
But behind the scenes and beyond the headlines, the story gets worse. Obamacare is hurting job-seekers and the small businesses that employ about half of our workforce.
For example, I recently heard from a small business owner who runs a temping agency. She has found herself in a bind. Obamacare’s employer mandate requires any businesses with more than 50 full-time employees to provide government-approved health insurance to each person who works more than 30 hours a week.
But as a temp agency, they have dozens of employees who find temporary, part-time work at 30-plus hours a week. Now, under Obamacare, these employees are full-time and trigger the mandate.
The business owner may want to grow and place more people in jobs, but thanks to the new rule, expanding will include huge costs of implementing Obamacare. It just doesn’t make good business sense—and it may simply shutter staffing agencies altogether.
Obamacare’s employer mandate discourages hiring beyond the magical “50” number and many businesses will cut back, convert full-time status employees to part time, or cut back hours.
When you consider how many Americans are relying on part-time temporary work just to make ends meet, the story is only more tragic. In September, 582,000 people took part-time work because they were unable to find full-time jobs.
How much more difficult will it be for these job seekers when employers decide not to hire the 51st employee or start cutting back hours of part time workers?
Of course, the employer mandate is only one act in Obamacare’s job-killing story. The nonpartisan American Action Forum released a report on how the health law’s regulations have hurt our economy to date. Thus far, the law’s regulations have placed a $27.6 billion burden on private and public sector employers.
Another job-killing provision in Obamacare that really hits close to home is the 2.3 percent tax on the sale of medical devices in the U.S. One of the biggest medical device manufacturers is GE Healthcare, a company that employs 6,500 Wisconsinites.
In fact, it was former Democratic Senator from Indiana Evan Bayh who wrote in the Wall Street Journal that the impact of the medical device tax will be “severe”:
The adverse effect of this confiscatory level of taxation on traditional device makers is already clear. In my state of Indiana alone, Cook Medical has canceled plans to build one new U.S. facility annually in each of the next several years, and Zimmer plans to lay off 450 workers, while Hill-Rom expects to lay off 200. Stryker, based in Michigan, anticipates having to lay off 1,000 workers.
Then-Speaker Nancy Pelosi made a promise to the American people at the White House’s Health Summit on February 25, 2010, about Obamacare’s impact on job creation. She said, "It's about jobs. In its life, it [the health care law] will create 4 million jobs – 400,000 jobs almost immediately."
That was 2010. Today, that projection sounds laughable. We might all share a chuckle if it wasn’t so depressingly off the mark. Any promise about jobs has been buried under these harmful provisions like the employer mandate, the $26 billion of regulations, and the medical device tax.
We all can agree that we need to reform our healthcare system. But these three provisions are just a few reasons Obamacare is not the answer. I believe the American people will be better served with focused, common-sense solutions. This is the best way to ensure a real shot at success – and one that will continue the U.S’s legacy of delivering the best healthcare in the world.