The Mother of All Ironies

With the recent passage of ObamaCare, the President now turns his attention to job creation. Yet, ObamaCare will be a big time destroyer of job creation.

Companies that have 50 or fewer full-time employees are exempt from having to provide health insurance. They have absolutely no incentive to go over the 50 limit. Those companies that are over the 50 limit by a dozen or so full-time employees will, most likely, layoff employees to get under the 50 limit. They could also get under the 50 limit by laying off workers and hiring them as temp or part time workers. Again, this does not exactly increase standards-of-living for workers.

Moving on. Companies with 51 to 200 workers that don’t offer health insurance coverage would pay an assessment of up to $3,000 per full-time employee if any of their workers were to receive a tax credit to buy health coverage. This would significantly increase the cost of labor. Companies would be forced to drastically cut labor expenses.

I would like to conclude this discussion with companies that have 200 or less employees. Why? According to a recent study of the U.S. Census Office, since 1980 almost 100% of the net new job creation in the U.S. came from companies that have been in operation five years or less. In other words, the great great majority of net new job creation came from not only small companies—but new small companies.

In economics as in life there are NO FREE LUNCHES. The economy, job creation, and opportunities will take a big hit from the Federal Government taking over one-sixth to one-seventh of the U.S. economy.