BRUCE KESLER: OBAMACARE CREATES UNEMPLOYMENT FOR LOWER WAGE FAMILIES
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ObamaCare Creates Unemployment for Lower-Wage Families
ObamaCare reduces the number of tax-paying Americans while increasing unemployment and adding to the personal and government costs of providing medical insurance.
It’s not just the 800,000 fewer workers seeking jobs under ObamaCare, as the CBO Director admitted last week to Congress, because the law will reduce “the propensity to work” in order to get medical insurance. With subsidized guaranteed issue of medical insurance, there will be less incentive to find a job with benefits. At the same time, medical insurance premiums will increase for all as ObamaCare’s guarantee issue creates an incentive to wait until ill to obtain insurance.
Further, due to higher required levels of benefits within allowed medical insurance policies, the premiums are increased for tens of millions, only deferred for this and maybe next year by the temporary waivers issued by the Obama administration.
On top of that, there will be untold tens or hundreds of thousands lower wage workers who want to work who will not be hired, because the required cost to employers of their medical insurance under ObamaCare is too high. The cost of medical insurance under ObamaCare will be near as much as lower wage workers earn, especially for those with a family. Indeed, many are not being hired now, as businesses restrain hiring to prevent being locked-in when this 2014 job-killing effect of ObamaCare kicks in.
In 2014, employers with 50 or more full-time employees, 30 hours a week or more, may only charge employees 8% of their income for their contribution toward employer-provided medical insurance. For a worker earning $125,000, that amounts to $10,000 toward the typical $20,000 annual cost of family coverage. That leaves the employer with $10,000 to pay, or an additional 8% above wages. For a worker earning $25,000, that amounts to $2,000 toward the typical $20,000 annual cost of family coverage. That leaves the employer with $18,000 to pay, or an additional 72% above wages.
Many sane employers will think twice and more before hiring that will bring its head-count to 50 or more. Many sane employers will hire those who are single, instead of with families, because of the required 8% of singles’ lower medical insurance premium. Many sane employers will seek efficiencies and technologies to avoid hiring lower-wage workers. Many sane employers will reduce hours worked by lower-wage workers in order to reduce its full-time head-count. Many sane employers will rather pay the $2,000 per worker ObamaCare penalty by ending its medical insurance program and letting the government provide medical insurance.
The ultimate toll of ObamaCare will be far greater than the $trillions in budget costs already estimated. ObamaCare’s budget costs will actually be even larger, and so will the as yet uncounted costs. The US tax-base will shrink while the number of unemployed will remain high.
The Constitutional challenges to ObamaCare center on the individual mandate, and on that causing the whole of ObamaCare to be thrown out of court. There is no other court recourse against these other travesties of ObamaCare. Only a Congress with both houses overcoming a Presidential veto can save us, or 2012 bringing us more in the Senate willing to vote for repeal and a new President willing to sign off.
It will be important to get across to lower-wage earners that they have much at stake in 2012. Posted by Bruce Kesler at 12:08
Bruce Kesler ChFC REBC CLU RHU
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