Dan Danner of the National Federation of Independent Business, an organization you may remember as the lead plaintiff in the Supreme Court case challenging Obamacare, just penned a piece in USAToday continuing to whine about the law while offering ZERO evidence beyond rank conjecture.
Recent news media coverage has highlighted larger businesses reducing employee hours below 30 hours per week in order to avoid the employer-mandate requirements or penalties. Smaller businesses, too, might be forced to reduce employment below the 50 full-time equivalent employee threshold, or resist growing above the threshold, to avoid the mandate. None of these options is productive, and they ultimately harm employees and the economy. Replacing one full-time position with two part-time positions is not job creation. Further, money that must go toward increased benefits or non-tax deductible penalties will crowd out wage increases and business investment.
This is a standard lament, bolstered by high profile temper tantrums from the likes of Papa John’s CEO John Schattner, who implied the new law would ruin him and lead to massive layoffs because it would increase the price of each pizza by 10-14 CENTS per pie — even though this translates to a fraction of a percent change in the company’s profitability.
But the point-of-view of this paragraph excludes the burdens placed on the employee. Without a critical eye, the reader might miss that the hypothetical companies in this example presently don’t provide health insurance. While working a full-time job, employees are still on the hook for their own expensive health care, taking a massive bite out of their weekly paycheck. Those companies juggling schedules to keep employees below 30 hours are creating a worse situation for their employees by taking money out of their pockets while still leaving the health care burden on the worker. But given the administrative costs and hassle of hiring two people to perform one job, most companies taking this route are hurting themselves far more than simply offering health care. As for a business limiting its employment to 50 full-time workers, this presupposes a business choosing stagnation over growth — if that’s their choice then bully for them, but it’s hard to find most 50+ worker businesses going this route.
While there’s some appeal to the logic set forth, there’s no evidence to support the claims. First, it ignores many provisions of the law, including a tax credit for small businesses to help pay for employee insurance and the fact that the health insurance exchanges being built by the law let small businesses pool their buying power. Danner doesn’t even breathe on these facts. Second, this is the rare instance of policymaking where we already have empirical evidence of the law’s impact. Massachusetts instituted this plan in 2006 and has seen no negative impact of jobs or growth. This is damning evidence and Danner says…nothing.
This is lazy advocacy, and regardless of political leanings Americans should demand better. Too often political commentators throw around focus group-tested arguments without any pressure to directly engage opposing arguments and we end up with a dumb echo chamber talking about death panels instead of citing facts.