Obamacare’s Effect On Fulltime Employment

As much as I doubt the effectiveness of Obamacare, as it is currently structured, I do recognize the importance of ensuring that people have affordable health care. Massachusetts seems to have found the secret, but I think our congress is so dysfunctional that the Republicans will not give an inch when it comes to affordable health care. However, the 1000 page plus document may be another example of how managers (Congress and the President) commit to a decision and continue to throw resources at it even though it may have been a horrible decision. Management Theory calls this escalation of commitment.

The reason I bring this up is due to the conflicting reports about the job situation in the United States. On the front page of the Wall Street Journal today you see an article about how “Job Gains Show Staying Power.” Brenda Cronin and Matt Wirz reported that the U.S. job market grew solidly in June, on top of gains in April and May. They say “The gains are respectable but not enough to dramatically shrink the unemployment rate.” The rate is hovering at 7.6%.

The counter discussion was found on the opinion page in an article entitled “Part-Time America.” This article gives us some very interesting detail. There were 195,000 net new hires in June of this year. This is pretty standard for the last few months. It also appears that the number of “long-time unemployed,” those out of work six months or more, is down by one million workers. However, the labor participation rate is still lower than what is considered normal. Instead of the normal 66%, 63.5% of those who are considered a part of the labor force are actually working.

Another problem is the big jump of what is considered discouraged workers. There are 247,000 more people who have stopped looking for a job. The reporters stated that this could be an anomaly, but we will see. The most telltale sign though of how Obamacare will impact the workforce is the rise in part time workers. The number of people that are considered underemployed, working part time even though they would like to work full time, is 8.23 million. A pretty big number!

Obamacare will eventually require employers with more than 50 fulltime workers to provide healthcare insurance “to all employees or pay a $2000 penalty per worker.” The law states that a fulltime worker is someone who works 30 hours per week. This means that the Affordable Healthcare Act will provide the incentive to push employers to hire part time workers.

Yes, the requirement for mandatory employer adherence to the law has been pushed out to 2015, but it is still a problem. Once again our congress has failed to see the system of our society. We are using old wine skins to preserve new wine, and we know what will happen there. The new wine will burst the skins (Luke 5:36-39). It is time for innovation and creativity for solving the big social problems in front of us.

It is time to rethink how we handle these old social problems. Maybe there are new entrepreneurial methods that can be used? I don’t think the market is good for solving all problems, but there may be some more socially responsible way to handle health care than having big government try to manage something that it does do very well.

And that is my thought for the day!

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3 thoughts on “Obamacare’s Effect On Fulltime Employment

  1. I think that it is your market that is messing things up right now when it comes to health care costs.
    http://www.businessweek.com/articles/2013-04-10/the-reason-health-care-is-so-expensive-insurance-companies013/02/19/important-what-are-medicares-true-administrative-costs/

    The answer to this social issue isn’t an entrepreneurial answer. It is a social answer. We need to start asking why anyone besides the medical professionals who aid us should profit in anyway from our well being or lack thereof.

    Medicare’s administrative costs are lower. I am sure that I would pay less in a healthcare tax than I do in the 476.00 a month I pay for private insurance. The answer is single payer. The answer is we stop living in the only industrialized nation where one can go bankrupt due to illness or accident. We could end 66% of the current reason for bankruptcy. Think of the positive impact that might have on the precious free market.

    • Scott
      I agree with you, this is a social problem. Wet met some folks from Canada over the weekend and discussed Socialized medicine. Not a pretty picture. However, they have a two tiered system which if you have enough money you jump to the head of the line. My argument includes a social entrepreneurial activity that is not concerned about profit, but about meeting need. In other words, think out of the box, exercise leadership.

      • Insurers do not insure that you get care. They don’t even insure that your care is completely paid for. No matter what system we try to develop, we are doing it wrong, the Affordable Care Act included, if we feel we must continue to make room for insurers to make a profit.

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