Obamacare’s provisions will result in significant job loss across America. Below is a summary of how Obamacare’s provisions will harm job growth:
- Employer mandate. Obamacare requires all businesses with 50 or more full-time employees to provide health coverage for their workers or pay a $2,000 penalty for each employee after the first 30 workers.The employer mandate creates incentives for businesses to avoid higher costs by, for example, hiring part-time employees instead of full-time employees, since businesses will not be penalized for failing to provide health insurance to part-time employees.In addition, as Heritage research shows, “Obamacare hurts less skilled workers. It raises the minimum productivity required for them to hold a full-time job, particularly workers with families.” The cost to an employer of hiring a full-time worker increases to at least $10.03 per hour and for those with family health coverage, it is at least $13.75 an hour. Research shows that “a third of uninsured workers earn within $3 of the minimum wage and therefore have a higher risk of losing their jobs because of an employer mandate.”Businesses can also avoid penalties by keeping the number of employees under the mandate threshold of 50, which further discourages creating new jobs.
- New taxes and regulations. Obamacare adds tons of taxes on employers. These additional costs reduce the ability to hire workers and could even prompt layoffs. One particularly damaging tax will be the 2.3 percent excise tax on medical devices. Research has shown that, “Under reasonable assumptions, the tax could result in job losses in excess of 43,000 and employment compensation losses in excess of $3.5 billion.”Obamacare also, for the first time, applies the Medicare payroll tax to high earners’ investment income, including capital gains. Taxing capital reduces economic growth and investment.
- Future costs and regulations are unpredictable. A recent study found that 33 percent of business owners cited new requirements in Obamacare as either the biggest or second-biggest obstacle to hiring. In addition, Dennis Lockhart, the president of the Federal Reserve Bank of Atlanta, said, “We have frequently heard strong comments to the effect of ‘My company won’t hire a single additional worker until we know what health insurance costs are going to be.’”