As ObamaCare continues to hit the country, we are seeing some new terminology emerge. To get there, here is more from the WSJ…
Welcome to the strange new world of small-business hiring under ObamaCare. The law requires firms with 50 or more “full-time equivalent workers” to offer health plans to employees who work more than 30 hours a week. (The law says “equivalent” because two 15 hour a week workers equal one full-time worker.) Employers that pass the 50-employee threshold and don’t offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. So by hiring the 50th worker, the firm pays a penalty on the previous 20 as well.
We’ve been covering this ever since the legislation passed, It was very predictable to say that to avoid all of the complications and stay in business, that people would end up working less than 30 hours a week, and businesses would be wise to keep their workforce below 50.
A 2011 Hudson Institute study estimates that this insurance mandate will cost the franchise industry $6.4 billion and put 3.2 million jobs “at risk.” The insurance mandate is so onerous for small firms that Stephen Caldeira, president of the International Franchise Association, predicts that “Many stores will have to cut worker hours out of necessity. It could be the difference between staying in business or going out of business.” The franchise association says the average fast-food restaurant has profits of only about $50,000 to $100,000 and a margin of about 3.5%.
Because other federal employment regulations also kick in when a firm crosses the 50 worker threshold, employers are starting to cap payrolls at 49 full-time workers. These firms have come to be known as “49ers.” Businesses that hire young and lower-skilled workers are also starting to put a ceiling on the work week of below 30 hours. These firms are the new “29ers.” Part-time workers don’t have to be offered insurance under ObamaCare.
Well, there you have it. We’ve been discussing this for a few years now. The information was available. If you voted for Obama, you voted for this. Being a “low information voter” is no excuse. Just remember that elections have consequences.
Eh, they’ll probably blame Bush.
This eventuality was totally predictable.
Yet another blow to the American economy!