Jan
07
2013

The absolutely EXPECTED small business fallout from Obamacare.

It would appear that many small business owners have noticed that the new rules for providing mandatory health insurance coverage have some significant loopholes: to wit, that they only apply to companies that employ fifty or more full time employers (which is to say, people who work for thirty or more hours a week).  The answer to handling the situation then becomes fairly obvious.

And it’s being implemented.  See Nebraska:

A fast-food chain is slashing employee hours so franchise owners don’t have to pay health benefits. Around 100 local Wendy’s workers have learned their hours are being cut. A spokesperson says a new health care law is to blame.

[snip]

The company has announced that all non-management positions will have their hours reduced to 28 a week. Gary Burdette, Vice President of Operations for the local franchise, says the cuts are coming because the new Affordable Health Care Act requires employers to offer health insurance to employees working 32-38 hours a week. Under the current law they are not considered full time and that as a small business owner, he can’t afford to stay in operation and pay for everyone’s health insurance.

And Missouri:

The Taco Bell in Guthrie cuts its full-time employees’ hours to avoid mandates under the new health care law.

[snip]

We talked to the company that owns the Guthrie restaurant today, and it confirmed the cuts. Now, employees there aren’t allowed to work more than 28 hours a week.

And pretty much everywhere else:

Many businesses plan to bring on more part-time workers next year, trim the hours of full-time employees or curtail hiring because of the new health care law, human resource firms say.

[snip]

About a quarter of businesses surveyed by consulting firm Mercer don’t offer health coverage to employees who work at least 30 hours a week. Half of them plan to make changes so fewer employees work that many hours.

This shouldn’t be surprising: when it comes to small businesses Obamacare is essentially putting a tax on success.  And if you want less of something, you tax it.  This elementary truth will no doubt bother a lot of people who seemed to think that the other people who magically create the jobs could be effectively bullied into keeping doing that, but guess what?  You actually can’t make a person grow a business if he or she doesn’t want to.

You just can’t.

Moe Lane (crosspost)

PS: This strategy is, by the way, not new.  When I was between undergrad and grad school I, being an English major, of course worked in a supermarket.  It was unionized and everything – and one of the things that the union had negotiated for was for health insurance for full time supermarket employees.  Great, huh? …Nope: the supermarket made darn sure that nobody worked full time.  There were maybe three, four employees who qualified.  And, of course, the union management didn’t say boo, because they were getting the dues anyway.

So recognize the situation.

9 Comments

  • Aruges says:

    Actually, the unions probably got more money as the store may have had to hire more part timers to cover the hours the old workers couldn’t now work.

  • Skip says:

    Supermarket? Was McDonalds not hiring? I mean, I figured you had to get your love of the McRib from somewhere.
    .
    More seriously, I’ve had this exact discussion with a liberal friend of mine who just could not believe that her hours were going to get cut as a result of Obamacare. She was convinced the law wouldn’t allow it, for some reason.

  • Wow. Unintended consequences from a law. Go figure.

  • jbird says:

    I thought liberals were supposed to be the educated elite bringing science to government and we were supposed to be the backwoods rubes. How is it they cannot think through the easiest to anticipate series of consequences? Too much Hume?

  • acat says:

    That’s an .. Interesting point, Moe.
    .
    Community organizers mostly crib their approach from union organizers.
    .
    The same counter-arguments should apply, right?
    .
    The downside, obviously, is that small business will be creating a lot of pro-union bias if they don’t approach this carefully…
    .
    Mew

    • myoda176 says:

      Do you think maybe that might be part of the point to show all those evil businessmen who care more about their profits than people and how everyone should be more pro-union? The unions have taken a few beatings in the last couple of years due to their arrogance in just assuming that everyone would have to suck it up and take it. Maybe this is why?

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  • Darin_H says:

    In the 90s, my father started a business. It took off wildly. And they purposely stopped growing the business when they hit 48 employees. There was just too much regulation when you got to 50 to be worth it. He made himself and 47 other people pretty wealthy in that time, too bad the government stopped it from being more.

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