Sunday, November 4, 2012

Obama Lied. Anyone Surprised?

During the tumultuous debates leading up to passage of Obamacare, President Obama promised Americans that if they are happy with their employer sponsored health insurance they will be able to keep it. Well somebody forgot to inform the administration about the laws of economics.

Today's Wall Street Journal article reveals that many corporations are now planning to hire part time instead of full time workers precisely because of the effects of Obamacare. They cite companies like Darden Restaurants, owner of Red Lobster and Olive Garden, who have decided that replacing full time workers with part timers will be much more economical. The reason is that companies have to pay a penalty of $2,000 for each employee who works more than 30 hours but isn't offered health insurance. The penalty goes up to $3,000 for each employee if the company health insurance is considered inadequate under the health care law.

Anna's Linens, a chain of stores that sells bedsheets and towels, began cutting the number of hours their full time workers could have each week, rendering them to part time status. Their CEO, Alan Gladstone, says that offering the comprehensive insurance coverage the new law requires for all 1,100 of their sales associates will be too expensive and the law prohibits companies from offering sparser but cheaper insurance. Their only alternative would be to raise prices, which would drive customers away.

Notice the insidious nature of these cuts. Many of these employers are in the service industry with razor thin margins. The employees who will be affected are usually the young, working at their first jobs. In this economy they are lucky to have a good job with any kind of health benefits. Now with Obamacare, that first step up the ladder to responsible citizenship has been pulled up and away. Without that first full time job leading to future career advancement, many of these kids will wind up in dead end part time employment, eventually dependent on the government for handouts. So Mr. Obama, we don't want four more years of laws that could lead to European levels of youth unemployment. If you win the election this week, I hope you have the tolerance to accept criticisms of this imperfect law, as no law is perfect as written the first time, and make meaningful changes to protect vulnerable employees. If you lose, well there will be few tears shed among the medical and business communities.

No comments:

Post a Comment