A side effect of more healthcare insurance coverage is becoming painfully apparent — a less robust economy for those struggling to stay afloat.
It all comes down to two numbers: 49 and 29.
Go above 49 employees and a business has to provide health insurance.
Have an employee work more hours a week, and if you provide health coverage you have to extend it to them as well.
The firms that provide the overwhelming majority of jobs for low-skilled and young workers — fast food places and small retailers — are already readjusting work schedules to avoid the 49-29 federal healthcare mandates. And they’re not just doing it to new workers. Existing workers are getting their hours slashed so they are working less than 29 hours.
The irony of this is obvious. The very people the federal government was trying to help by extending them health insurance not only won’t be getting health insurance but they will be making less money to pay for necessities such as food, clothing, and shelter.
But there is a silver lining — at least for government statisticians. Already there are more jobs being created although they are primarily less than 29 hours. In all likelihood people who were once working 30 to 40 hours a week for one employer will be working 25 to 40 hours for two employers. While they could end up with a couple more hours they still won’t have health insurance. If they’re unlucky enough to have young kids that need childcare they can have the added bonus of trying to find sitters and paying for them to cover odd hours.
The 49-29 requirement will simply solidify a trend that’s been happening since 2000, when 3 million Americans were reduced to part-time employment. The Bureau of Labor statistics show that number tripled to about 9 million by the start of 2012.
Obviously, you can’t blame the trend on federal healthcare requirements. But you can credit the mandatory insurance requirement for helping cement part-time employment as a lifetime career path for many struggling Americans.
Before the anti-Obama crowds gets smug, let’s make one thing clear. The Republicans never really addressed healthcare access and payment issues when they were in charge. If anyone gets on their high horse and says universal healthcare isn’t the federal government’s business, neither should be giving big corporations massive tax credits at the expense of everyone else. And for the record, Democrats as well as Republicans are guilty of that transgression.
As for the Obama fanatics, what did you expect? Small businesses — according to the Small Business Administration — have generated 65 percent of all jobs over the past 17 years. And while there is a debate about whether that federal number is inflated, it is clear that small businesses are critical to getting people employed.
The lion’s share of small businesses generate about $100,000 a year in net income based on the Internal Revenue Service’s S corporation data. If they have 50 employees and they have to fork over $2,200 per worker on average for health insurance, they will have no net income. So before anyone accuses most small businesses of gaming the numbers, if they didn’t many would cease to exist.
The federal healthcare mandate may not be a job killer per se but it certainly will reduce the hours many current and future workers will receive.
Had there been a serious debate about what was really needed — universal access to healthcare or universal health insurance, which are two different things — the outcome may have been different.
If actual healthcare was what mattered, the government could have established a clinic and hospital system staffed primarily by new doctors and nurses. In exchange for their medical education being paid for by federal taxpayers, they’d be required to work a set amount of years at capped salaries. Then at the end of that period they would be free to move on to the private sector and make whatever the market will allow.
As things stand now the very people who would supposedly benefit the most from the federal healthcare mandate are going to be hurt the most.
Maybe to help them some more, Congress can raise taxes to save the jobs of bureaucrats along the Potomac who have Lexus-level healthcare and benefit packages.
In a way, Americans have gotten what we deserve.
We have allowed a system to be created where our elected leaders are so far removed from us that they attend $10,000-a-plate dinners in San Francisco and Hollywood while most of the rest of us try to figure out if we have enough money leftover this week from increased payroll taxes and higher gas prices to take the kids to McDonald’s to dine off the value menu.
This column is the opinion of Dennis Wyatt and does not necessarily represent the opinion of The Journal or Morris Newspaper Corp. of CA.