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Impact of Obama care and Higher Minimum Wage Requirements on Employment

Sep 24, 2016

ObamaCare (PPACA) and the higher minimum wages have had a substantial impact on both our industry (Food Service) and that of many ‘labor-heavy’ organizations across the US.

The Press is trying to tell us differently:

FACT: While we have seen a drop in full-time labor in favor of part-time labor under the Affordable Care Act, as of August 2015 we had also seen 58 consecutive months of net job growth since October of 2010 – According to the Department of Labor

As an effect of the new employer mandate some larger firms who have to provide insurance for employees come 2015/2016 [have been] cutting back employee hours to part-time to avoid paying for their health coverage. Other employers have moved workers from part-time to full-time to embrace the law. Impact of ObamaCare on Jobs

 

What about the employee?
Statistics show that the actual cost for the employee for full coverage is ‘substantially less’ when the employer in fact does not offer insurance. Under an employer plan the employee may end up paying two to three times as much for the premium than they would have if the employer was not required to offer PPACA Qualified Plans.

In addition, there is less “Job Lock” when the employer does not offer health care coverage allowing employees to make better decisions on the best employers for each of them without having to hang-on just because of benefits.

The CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024. The reduction in the CBO’s projections of hours worked represents a decline in the number of full-time equivalent workers (total hours based on all part-time and full-time employees, not actual job loss from full-time workers losing their jobs or not being able to find work) of about 2.0 million in 2017, rising to about 2.5 million in 2024. – Obamacare Facts 2016

 

As Restaurant Consultants, we tend to agree with this statement as our experiences in the field, with small to medium size employers demonstrates, there is a focus by employers on remaining below the 50 FTE (Full Time Equivalent) requirement.