http://www.economist.com/blogs/democracyinamerica/2014/02/obamacare-and-employment
Many Republicans believe that the Affordable Care Act, better known as Obamacare, would be terrible for the economy by increasing unemployment. A recent report written by the Congressional Budget Office is forecasting the same idea for the near future.
The CBO has predicted a decrease in full-time employment by 2.3 million jobs by the time 2021 rolls around. This prediction is based upon the concept that citizens will choose to work less. In order to help lower income citizens purchase the healthcare, Obamacare offers tax cuts to those earning between 100% and 400% of the federal poverty line. This tax cut is predicted to dissuade people from working more because as their income rises, the tax rate rises, erasing the incentive to earn more money. Another affect of Obamacare is a higher standard of living for those around the poverty line. Now that lower class citizens have healthcare and a higher living standard they will be discouraged from working.
The biggest effect of Obamacare will harm employers, who now have to provide affordable health insurance for all full-time employees if they have over 50 on their payroll. This does not seem like a bad plan for the employees, however they will feel the pain because in order to offset the cost of providing health insurance, employers may resort to lower wage rates. The lower wage rate will cause a decrease in labor supply.
Although Obamacare's main objective was to help the needed and redistribute wealth from the rich to the poor, many critics believe that they are actually doing the opposite while increasing the unemployment rate. The reasoning being even though the average income for the needy does rise slightly when full value health care is added in, this healthcare is not liquid so it cannot be used for everyday costs like food and rent.
I agree with the fact that Obamacare will hurt employers. Smaller businesses cannot afford to pay healthcare costs for all of their full-time employees that might not have previously qualified for their healthcare plans. Also, this could cause many small businesses to shut down if they so choose to provide healthcare for their employees and eventually get into a bad economic situation.
ReplyDeleteEffect of Obamacare will harm employers,but the satisfaction and loyalty of employee will be increased. Compared with the health care of ohter countries, that of U.S is broken down. I think that the action of Obma is right. Even if the economy is harmed, the health care should be revived.
ReplyDeleteI couldn't agree more with this article. The implementation of Obamacare will hurt the economy more than it will help it. Each point that is made here is spot on. Employers will have to decrease the number of employees they hire, they may choose to cut wages, they also have to pay for this health care. That right there shows that this will hurt the job market much more than it will help it. Obama should study the European model of social welfare and determine if it is actually practical to implement it in such a way in America.
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