Will Obamacare hurt job creation and marriage?
Diana Furchtgott-Roth Archives
Sept. 27, 2013, 6:30 a.m. EDT
Commentary: Families and employers pay the price
At one time, getting a job was not that much of a problem. Neither was getting married. But the Affordable Care Act appears to create substantial disincentives both to hiring and marriage, potentially changing the fabric of American society in serious ways.
Let’s first look at hiring.
The Affordable Care Act is partly responsible for the slow jobs recovery. If employers with 50 or more employees do not offer the right kind of health insurance, and at least one employee gets subsidized coverage on the exchange, they are faced with penalties of $2,000 per employee per year. Since the first 30 workers are exempt from the penalty, moving from 49 to 50 workers can cost an employer $40,000 a year.
No wonder that many small businesses are opting to stay at 49 workers. If they decide to expand, they can use temporary workers or contract employees.
Bob Funk, president and founder of Express Employment Services, the fifth-largest employment agency in America, told The Wall Street Journal in an interview published last week, “Obamacare has been an absolute boon for my business…We’re up 8% this year. But it’s just terrible for the country.”
Funk continued, “Firms are just very reluctant to hire full-time workers. So they are taking on more temporary help, which is what we do.”
Companies can get around the penalty by hiring part-time workers, because they do not owe the $2,000 penalty on those who work fewer than 30 hours a week. Many companies such as SeaWorld SEAS -1.05% , Wal-Mart WMT -0.35% , and Lands’ End SHLD -2.20% , are substituting part-time for full-time workers.