Double Whammy: Obamacare Might As Well Be A Minimum Wage Hike For Businesses — In Addition To The Real One He’s Supporting


President Barack Obama is on board with fellow Democrats who want to raise the National minimum wage to $10.10 per hour. But even if he doesn’t get his way, the President has already effectively laid the same financial burden on employers, without benefiting actual employees, thanks to Obamacare.

The White House made it known last month that Obama supports a big jump in the mandatory minimum wage, from the current $7.25 per hour to $10.10, with future changes tied to the rate of inflation.

That outstrips even Obama’s own earlier ambitions to see minimum wage raised to $9 per hour, as he set forth in his State of the Union address earlier this year. But that ambition has been outdone by Senator Tom Harkin (D-Iowa) and Representative George Miller (D-Calif.), who have introduced the $10.10 proposal in separate, but similar, bills in each chamber of Congress.

Not addressed in either of those measures is the fact that, so far as many employers are concerned, the minimum wage might as well be $10.10 — or higher — for all but the smallest of business owners employing full-time workers. In a revealing study released Nov. 22, The Heritage Foundation took a look at Obamacare’s economic impact on nationwide businesses forced to offer revised healthcare plans that meet the law’s new minimum coverage standards.

What did The Heritage Foundation find?

The government has already effectively raised the minimum wage above $10 per hour — without benefiting workers. President Obama’s health care law requires employers to offer full-time employees health benefits that meet certain “minimum standards” criteria. Otherwise, they pay a penalty. In 2015, this mandate will raise the minimum productivity necessary to hold a full-time job to $10.30 per hour. Employers will lose money if they hire employees who produce less than this amount.

The President now proposes raising the national minimum wage to $10.10 per hour. Coupled with the employer penalty and existing taxes, this would raise the minimum cost of hiring a full-time worker to $12.71 per hour. Employers would respond by eliminating jobs and cutting workers to part-time status, making it significantly more difficult for unskilled workers to get ahead.

The Obama Administration would doubtlessly counter that workers will see a direct benefit, in the form of insurance that doesn’t carry lifetime limits or bar coverage for pre-existing medical conditions. But it isn’t the Obama Administration that’s bearing the brunt of the cost increase necessitated by those kinds of guarantees; it’s the private sector — the profit-seeking capitalists who are exposing themselves to the kinds of risk the government hides behind. They’re the very same people Obama famously told weren’t solely responsible for building the Nation’s infrastructure:

If you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there.  It must be because I worked harder than everybody else. Let me tell you something – there are a whole bunch of hardworking people out there.

“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen.

But that “somebody else” is not the government; it’s other people who’ve earned money of their own. The government takes from the private sector, producing nothing of its own save for fiat money that exists only as long as people believe it does. The government reapportions, rearranges and fabricates.

Here’s more from The Heritage Foundation:

Obamacare requires many employers with 50 or more employees to offer qualifying health coverage to their full-time workers. This health coverage is expensive. In 2015, it will add $2.24 per hour to the cost of employing a worker with single coverage. Those that do not provide coverage face a fine of $2,000 per employee per year (after the first 30 workers) that comes out of after-tax dollars. This equates to a $3,279 increase in pre-tax payroll costs — $1.64 per hour. The Administration has delayed the mandate’s implementation until 2015. When it takes effect, it will increase the cost of hiring unskilled workers.

These costs are on top of other government mandates. Businesses must also pay the minimum wage, the employer share of payroll taxes, and unemployment insurance (UI) taxes. Normally, businesses defray these costs by reducing workers’ wages by an offsetting amount. However, employers cannot reduce the pay of minimum-wage employees, so they must pay these payroll costs themselves or forgo hiring.

We drive on roads, house our inmates and educate our children (sort of) within a public infrastructure paid for by redistributed private wealth. Now Obama wants us to acquiesce to the same concept in the health insurance realm by forcing employers, who expose themselves to all the risk of the marketplace, to take on an immense increase in the price threshold to procure hired help. And then he wants to add insult to very real financial injury by forcing them pay at least that much more money in real wages.

Obama’s fiscal policy sets new superlatives for the expression “double whammy.”

Personal Liberty

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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