Obama’s Health “Insurance” Hiring Disincentives

Here’s the Obama Job Sharing Plan.  As a result of the looming rules of President Barack Obama’s Obamacare,

a local McDonalds has hired employees to operate the cash register or flip burgers for 20 hours a week and then the workers head to the nearby Burger King or Wendy’s to log another 20 hours. Other employees take the opposite shifts.

That’s because 30 hours counts as a full-time employee, and low-margin industries can’t afford the added costs of Obamacare insurance for full-timers.  Holding the employees further under that threshold—to 20 hours, for instance—gives those part-timers room to get another part-time job and so to have a full week’s worth of work and income.  Just with no employer-provided health insurance.  (Whether this is good or bad is a separate post; I’ll just say here that the “good” of it is far from established.) This is not atypical.

[Obamacare] requires firms with 50 or more “full-time equivalent workers” to offer health plans to employees who work more than 30 hours a week.  (The law says “equivalent” because two 15 hour a week workers equal one full-time worker.)  Employers that pass the 50-employee threshold and don’t offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees.  So by hiring the 50th worker, the firm pays a penalty on the previous 20 as well.  [Emphasis added]

That’s a $40,000 penalty for hiring the 50th worker.  The WSJ lays it out starkly:

If a company with 50 employees hires a new worker for $12 an hour for 29 hours a week, there is no health insurance requirement.  But suppose that worker moves to 30 hours a week.  This triggers the $2,000 federal penalty.  So to get 50 more hours of work a year from that employee, the extra cost to the employer rises to about $52 an hour—the $12 salary and the Obamacare tax of what works out to be $40 an hour.

That encourages hiring, all right.

There are other implications.

Businesses that hire young and lower-skilled workers are also starting to put a ceiling on the work week of below 30 hours. These firms are…”29ers.”  Part-time workers don’t have to be offered insurance under Obamacare.

These young and low-skilled workers are at the point of their careers where they’re starting to accumulate the work experience and habits that can lead to better jobs at higher pay.  Only they’re not accumulating them at the rate they otherwise could.  Which puts them well behind the job competition power curve compared to those who’ve managed that jump.

So much for upward mobility in the Obama régime.

Also with the Obama Job Sharing Plan, health insurance accessibility, for good or ill, is actively reduced.

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