How many jobs does ObamaCare kill?
Casey B. Mulligan, University of Chicago economist, recently answered this provocative question in an Op-Ed for The Wall Street Journal. Mulligan put this issue in perspective when he said:
“Democrats loudly complain that people will lose health insurance if the Affordable Care Act is repealed. They never mention those who lose jobs because the ACA remains.”
The key to understanding this is a provision of ObamaCare known as The Employer Mandate. This penalizes employers that fail to provide “adequate” insurance for full time workers – if the company has more than 50. According to Mulligan, hiring the 50th full time worker costs an additional $70,000 a year on top of the normal salary and benefits.
To avoid this penalty, many employers avoid hiring more than 49 full time workers and hire more part-time workers (less than 30 hours/week). Supporters of ObamaCare have long dismissed this argument as insignificant. Mulligan has done the research to address this question definitively.
Mulligan partnered with The Mercatus Center at George Mason University to commission Hanover Research to survey small businesses nationwide regarding their hiring and compensation practices. The result gave them a sample of 745 small businesses, representing every major industry and together employing almost 50,000 people.
Those employers who employed just fewer than 50 often said the ACA caused them to hire less and cut hours below the full-time threshold. The ACA penalty caused them to shrink payrolls and prevented them from growing.
As a result of their survey they concluded the ObamaCare penalties that inspired employers to keep fewer than 50 full time employees has cost roughly 250,000 jobs. This calculation does not count those jobs lost when businesses close.
Mulligan estimates this situation will get worse since the penalty grows and the effectiveness of enforcement is also expected to grow.
Did more employers offer healthcare insurance as a direct result of ObamaCare?
About one third of the businesses surveyed now offer coverage to their employees as a result of the law. But two-thirds of those now not offering coverage previously did offer it. Because of the perverse incentives built into the law, some managers said the exchanges are a new option and that offering coverage at work would render employees and their families ineligible for government subsidies.
In other words, ObamaCare continues to be one of the reasons our economy continues to exhibit sluggish growth. As Mulligan says, “Maybe it’s time for repeal.”