Obamacare cost...

[byu71]

Correlation does not equal causation.

I would like your opinion on Obama doing a waiver or something late last Friday that exempts Congress and their staff from the Obamacare law they wrote?

[Color Me Badd Fan]

Correlation does not equal causation.

That's pretty funny coming from the guy who posited that Obamacare caused the decline in the growth rate of health care costs (when the trend had started 7 years before passage and over 10 years before full implementation). Good hell, you didn't really even have correlation on your side and you still went that route. Seems like you pick and choose when correlation does equal causation.

Now you conveniently ignore that Obamacare gives employers the incentive to hire the fewest full-time employees possible and the employment numbers seem to bear out an overwhelming preference for part time employees.

"Correlation does not imply causation" works where one is connecting two occurrences that share no underlying facts. The sky doesn't turn from black to blue because I wake up in the morning. Obamacare didn't cause the decline in health care expenditure growth rates that were already declining 7 years before its passage. Obamacare does cause the explosion of part time jobs vis a vis full-time jobs when provides a direct incentive (a minimum of $3,000 per year to be exact) to employers to have an overwhelming preference for part timers over full timers.

Your defining of the employer penalty as "ancillary" costs just shows how clueless you are as to incentives that employers pay attention to. For a company that already has over 50 employees, every full time employee brought on means they either have to pay their health insurance or pay a penalty of $3,000. The penalty is going to be lower than what the health insurance is going to cost (good luck finding a group plan with a premium of $250 or less per month).

So, you do the math. A typical non-managerial employee at Wal-Mart can make about $25,000 per year. Add in the payroll taxes and we're at about $27,000 as to the cost to the company. Basically, Obamacare adds a 10% charge above and beyond the cost for a full-time employee to Wal-Mart. Why would an outfit like Wal-Mart ever take on another non-managerial full-time employee under these circumstances? Adding 10% to the cost of hiring of an employee isn't ancillary.

For a company of 30-50 employees, they have a double incentive not to hire a full-time employee. They don't want to exceed 50 full time employees to come within reach of Obamacare -- 49 employees = not worrying about Obamacare, 50 employees = up to $150,000 in penalties to the government.

Maybe you should remind everyone again how the stop in stimulus spending has caused employers to have this preference for part time employees over full time employees. Seems like you backed that one up pretty well.

[imanihonjin]

I would like your opinion on Obama doing a waiver or something late last Friday that exempts Congress and their staff from the Obamacare law they wrote?

As an Obama hater, this is really a false attack. All that happened with Congress and their staffers was to allow the federal government to continue to pay up to 75% of the staffers and Congressmen/women/peoples premium under the insurance exchanges. Without such a waiver, these individuals would have gone from having 75% of the premium covered to nothing.

[calicoug]

Of course there are going to be a number of employers who say it will cost me $100x to employ 75 employees with benefits but only $80x if I hire 50 part timers and 45 full timers to do the same job. Yeah I may incur some extra administrative costs and it will be pain managing that many more people, but I save $20x.

Will there be some? Sure. Will there be so many that we can attribute part time hiring to be the result of the (delayed) employer mandate? That's where I'm very skeptical. It isn't as if hiring multiple part timers involves no additional expense (including head count to manage all the part timers). It is a big stretch to attribute causality to a delayed employer provision which involves some additional tax deductible healthcare costs- particularly keeping in mind employers historically strongly prefer adding health care costs instead of wage costs because of tax attributes. This is precisely why unions have such amazing health plans and why the Cadillac tax was necessary.

This is also one reason why most large employers already offer health insurance.

To argue that the employer mandate is driving the shift from full to part time positions means that employers who don't already offer healthcare are effectively doing all of the hiring right now and are all making the decision to only hire part time to avoid offering healthcare- even though that decision has its own costs.

How likely does that sound to you?

[calicoug]

As an Obama hater, this is really a false attack. All that happened with Congress and their staffers was to allow the federal government to continue to pay up to 75% of the staffers and Congressmen/women/peoples premium under the insurance exchanges. Without such a waiver, these individuals would have gone from having 75% of the premium covered to nothing.

Exactly.

[imanihonjin]

Will there be some? Sure. Will there be so many that we can attribute part time hiring to be the result of the (delayed) employer mandate? That's where I'm very skeptical. It isn't as if hiring multiple part timers involves no additional expense (including head count to manage all the part timers). It is a big stretch to attribute causality to a delayed employer provision which involves some additional tax deductible healthcare costs- particularly keeping in mind employers historically strongly prefer adding health care costs instead of wage costs because of tax attributes. This is precisely why unions have such amazing health plans and why the Cadillac tax was necessary.

This is also one reason why most large employers already offer health insurance.

To argue that the employer mandate is driving the shift from full to part time positions means that employers who don't already offer healthcare are effectively doing all of the hiring right now and are all making the decision to only hire part time to avoid offering healthcare- even though that decision has its own costs.

How likely does that sound to you?

"additional tax deductible health care costs"?!? You act like employers are going to be happy that the government stepped in and said hey you have to provide health insurance at a cost of $8-12k per employee but don't worry those are tax deductible. First of all that is preposterous. It isn't much of a tax break to the employer who would be able to deduct the payment whether it came in the form of health care premium payments or salary (the only benefit to the employer is that it doesn't have to pay employment taxes on such expenditures).

So yeah if I have a small profit margin and have 75 employees that I can't add the expense of providing health insurance for without going broke then my options are a) fire 26 employees; b) reduce 26 employees hours below 30 hours a week c) paying the penalty (which I can't afford because the margins are already small to begin with); d) go out of business.

You are right, a lot of businesses offer health insurance, but there are many many small businesses who do not. Small businesses employ the majority of American workers and a substantial amount of those do not provide health insurance meeting Obamacare standards. Unfortunately, in order to stay in business and make a decent return, due to the options noted above, business owners will have to either lay a large number of people off to get under the 50 full time employee threshold, or will have to reduce hours. These cuts will most hurt individuals that Obama's stupid plan was supposedly intended to help. It really is an awful piece of legislation.

[Pelado]

Will there be some? Sure. Will there be so many that we can attribute part time hiring to be the result of the (delayed) employer mandate? That's where I'm very skeptical. It isn't as if hiring multiple part timers involves no additional expense (including head count to manage all the part timers). It is a big stretch to attribute causality to a delayed employer provision which involves some additional tax deductible healthcare costs- particularly keeping in mind employers historically strongly prefer adding health care costs instead of wage costs because of tax attributes. This is precisely why unions have such amazing health plans and why the Cadillac tax was necessary.

This is also one reason why most large employers already offer health insurance.

To argue that the employer mandate is driving the shift from full to part time positions means that employers who don't already offer healthcare are effectively doing all of the hiring right now and are all making the decision to only hire part time to avoid offering healthcare- even though that decision has its own costs.

How likely does that sound to you?

Yes it has its own costs. Some businesses will be able to mitigate those costs better than other businesses.

Also, you're promoting a false narrative. Not all new jobs are part-time - just the net new jobs. Certainly some of the new jobs are full-time, but those new jobs are offset by losses among full-time employees.

If the Affordable Care Act is not causing this unprecedented* shift to part-time employment, what other driver(s) would you consider to be the causation of this sudden move to part-time employment?

*Is there any precedent for this shift to part-time employment? Anyone have any data for any similar shift?

[Color Me Badd Fan]

Will there be some? Sure. Will there be so many that we can attribute part time hiring to be the result of the (delayed) employer mandate? That's where I'm very skeptical. It isn't as if hiring multiple part timers involves no additional expense (including head count to manage all the part timers). It is a big stretch to attribute causality to a delayed employer provision which involves some additional tax deductible healthcare costs- particularly keeping in mind employers historically strongly prefer adding health care costs instead of wage costs because of tax attributes. This is precisely why unions have such amazing health plans and why the Cadillac tax was necessary.

This is also one reason why most large employers already offer health insurance.

To argue that the employer mandate is driving the shift from full to part time positions means that employers who don't already offer healthcare are effectively doing all of the hiring right now and are all making the decision to only hire part time to avoid offering healthcare- even though that decision has its own costs.

How likely does that sound to you?

If you want to talk about stretches, you should revisit your argument that ending the stimulus led to this seemingly overwhelming preference for part time jobs.

Employers aren't going to hire more full time employees because the employer mandate was pushed back a year. Businesses don't adjust their practices based on short term government ploys.

This is first time I've ever seen the additional Obamacare expense characterized merely "as additional tax deductible health care costs." I guess that's a step in the right direction from labeling them "ancillary." Even after you take into account the deductible nature of it, you're still talking about $3,000 here for an employee who's getting paid $25k a year.

When you have a struggling economy, like we have, with a growth rate of 1.7% a year, the jobs that are being created are primarily those that typically don't offer health insurance -- they're shitty jobs. Whether this is an indictment of the Obama administration or just part of the current natural business cycle is immaterial -- those are the jobs that are being created right now. In the past, many of these jobs would have been full time. Now they're part time because of the additional expense.

In a normal expansionary period, Obamacare would still influence the part time vs. full time ratio -- just not as much as it is right now because of the nature of the jobs being created. One part of it is businesses being careful and the other part of it is Obamacare.

[snowcat]

Will there be some? Sure. Will there be so many that we can attribute part time hiring to be the result of the (delayed) employer mandate? That's where I'm very skeptical. It isn't as if hiring multiple part timers involves no additional expense (including head count to manage all the part timers). It is a big stretch to attribute causality to a delayed employer provision which involves some additional tax deductible healthcare costs- particularly keeping in mind employers historically strongly prefer adding health care costs instead of wage costs because of tax attributes. This is precisely why unions have such amazing health plans and why the Cadillac tax was necessary.

This is also one reason why most large employers already offer health insurance.

To argue that the employer mandate is driving the shift from full to part time positions means that employers who don't already offer healthcare are effectively doing all of the hiring right now and are all making the decision to only hire part time to avoid offering healthcare- even though that decision has its own costs.

How likely does that sound to you?

The Huffington Post disagrees with you:

The health care reform law's "pay or play" requirement that companies either offer qualifying benefit plans or pay financial penalties, however, will affect hiring and the hours available to part-time workers, the survey shows. Almost 20 percent of companies with fewer than 50 employees has or will curtail adding staff to avoid triggering the so-called employer responsibility clause of the law. The same percentage has or plans to keep some workers below the 30-hour threshold that designates them as full-time.

original.jpg

http://www.huffingtonpost.com/2013/05/16/obamacare-employers_n_3286508.html

[calicoug]

The Huffington Post disagrees with you:



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http://www.huffingtonpost.com/2013/05/16/obamacare-employers_n_3286508.html

You realize that read another way, 90% or more surveyed said they weren't making any changes at all or the question wasn't applicable, right?

[calicoug]

That's pretty funny coming from the guy who posited that Obamacare caused the decline in the growth rate of health care costs (when the trend had started 7 years before passage and over 10 years before full implementation). Good hell, you didn't really even have correlation on your side and you still went that route. Seems like you pick and choose when correlation does equal causation.

First, I didn't posit it. The majority of economists looking at the issue did and I merely cited them. Second, it's amazing you still can't appropriately rephrase the issue even after having had it explained to you over and over again. Rather than try once more, I'll just ask you to go back and re-read and let's all hope for a better result this time.

Now you conveniently ignore that Obamacare gives employers the incentive to hire the fewest full-time employees possible and the employment numbers seem to bear out an overwhelming preference for part time employees.

I don't ignore it at all. I just completely disagree with your conclusion that Obamacare is causing all of the part time hiring to occur in lieu of full time hiring.

"Correlation does not imply causation" works where one is connecting two occurrences that share no underlying facts.

That's not true at all. It can also apply when underlying facts are shared. I'm not even sure why you think this. Example: BYU plays football and selected the Cougar as a mascot. Washington State plays football and selected the Cougar as a mascot. Same underlying facts. But playing football did not cause either to select a Cougar as a mascot.

The sky doesn't turn from black to blue because I wake up in the morning.

Finally something you wrote which is accurate. If only it was also relevant. 1 out of 2 aint bad though.

Obamacare didn't cause the decline in health care expenditure growth rates that were already declining 7 years before its passage.

It didn't cause declines in growth rates that predate Obamacare, but that doesn't say anything about growth rates after it was passed. You are assuming the factors that caused growth rates to slow in one period must have remained in place and continued to cause a slowing in growth rates at all times. Economists disagree with you.

Obamacare does cause the explosion of part time jobs vis a vis full-time jobs when provides a direct incentive (a minimum of $3,000 per year to be exact) to employers to have an overwhelming preference for part timers over full timers.

Providing an incentive is not the same thing as "causing an explosion" of jobs to shift from full time to part time.

Your defining of the employer penalty as "ancillary" costs just shows how clueless you are as to incentives that employers pay attention to. For a company that already has over 50 employees, every full time employee brought on means they either have to pay their health insurance or pay a penalty of $3,000. The penalty is going to be lower than what the health insurance is going to cost (good luck finding a group plan with a premium of $250 or less per month).

Again, the employer will receive a deduction for health care costs, so it isn't a dollar for dollar comparison. That doesn't make it an irrelevant cost, but it helps blunt the impact. Overall, I would prefer to see the employer mandate go away (or be raised to a higher number of employees) and just allow those employees to get health insurance through the exchanges, but someone is still going to have to pay for the health care costs. It isn't as if the alternative approach is "free health care if your employer doesn't offer it to you."

So, you do the math. A typical non-managerial employee at Wal-Mart can make about $25,000 per year. Add in the payroll taxes and we're at about $27,000 as to the cost to the company. Basically, Obamacare adds a 10% charge above and beyond the cost for a full-time employee to Wal-Mart. Why would an outfit like Wal-Mart ever take on another non-managerial full-time employee under these circumstances? Adding 10% to the cost of hiring of an employee isn't ancillary.

There are lots of reasons, but Forbes has plenty listed here:

http://www.forbes.com/sites/laurahel...rs-into-temps/

There's a reason Target and many other companies offer health insurance to full and part time workers.

For a company of 30-50 employees, they have a double incentive not to hire a full-time employee. They don't want to exceed 50 full time employees to come within reach of Obamacare -- 49 employees = not worrying about Obamacare, 50 employees = up to $150,000 in penalties to the government.

So you think there are lots and lots of companies out there who have 30 employees right now, are seeing so much demand they need to hire 20 more people to meet that demand, but they are going to change their mind because of health care costs? That may apply to a few companies, but it certainly won't be the rule.

Maybe you should remind everyone again how the stop in stimulus spending has caused employers to have this preference for part time employees over full time employees. Seems like you backed that one up pretty well.

I don't recall saying the stop in stimulus turned people towards part time hiring. What I recall saying was that the slowdown in government spending was hurting hiring. I'm certainly not alone in that sentiment.

[calicoug]

Yes it has its own costs. Some businesses will be able to mitigate those costs better than other businesses.

Also, you're promoting a false narrative. Not all new jobs are part-time - just the net new jobs. Certainly some of the new jobs are full-time, but those new jobs are offset by losses among full-time employees.

If the Affordable Care Act is not causing this unprecedented* shift to part-time employment, what other driver(s) would you consider to be the causation of this sudden move to part-time employment?

*Is there any precedent for this shift to part-time employment? Anyone have any data for any similar shift?

I'm not sure anyone knows for certain why there are so many part time jobs right now, but my guess would be that we are coming out of an extremely lengthy period of high unemployment and many are attempting to rejoin the workforce after a long absence. The sectors that are hiring the most right now are retail and leisure and hospitality, which tend to be part time work anyways. So, people who are rejoining the workforce are finding the jobs that are available, and those tend to be part time positions. Obamacare may be a factor for a portion of the change, but I think you would be hard pressed to demonstrate it is the primary driver let alone the sole cause.

[calicoug]

"additional tax deductible health care costs"?!? You act like employers are going to be happy that the government stepped in and said hey you have to provide health insurance at a cost of $8-12k per employee but don't worry those are tax deductible. First of all that is preposterous. It isn't much of a tax break to the employer who would be able to deduct the payment whether it came in the form of health care premium payments or salary (the only benefit to the employer is that it doesn't have to pay employment taxes on such expenditures).

So yeah if I have a small profit margin and have 75 employees that I can't add the expense of providing health insurance for without going broke then my options are a) fire 26 employees; b) reduce 26 employees hours below 30 hours a week c) paying the penalty (which I can't afford because the margins are already small to begin with); d) go out of business.

You are right, a lot of businesses offer health insurance, but there are many many small businesses who do not. Small businesses employ the majority of American workers and a substantial amount of those do not provide health insurance meeting Obamacare standards. Unfortunately, in order to stay in business and make a decent return, due to the options noted above, business owners will have to either lay a large number of people off to get under the 50 full time employee threshold, or will have to reduce hours. These cuts will most hurt individuals that Obama's stupid plan was supposedly intended to help. It really is an awful piece of legislation.

That's not really true, though. This isn't a binary issue of "get below 50 employees or definitely lose money." If that's true for any companies, it's a small, small percent of them. If a company would rather lay off 26 employees than take on additional health care costs, they really are operating on ultra-thin margins and are already getting very little benefit out of the 26 employees. More likely, employers will find other areas where they can cut costs or areas where they can increase sales or areas where they can increase pricing (or a combination of those activities). If they have 75 employees as in the example you cite, the odds are their competitors are already offering health insurance and have figured out a way to make it work.

I'm not suggesting the issue will be easy for companies to solve. It won't be. That's an unfortunate part of an American system where we tie health care to employment far too much already. I would prefer to cut the bond completely between health care and employment and move everyone into an exchange system (eliminating the employer deduction for health care would go a long way towards making this happen on its own). The costs are real for employers and they are tough to manage- I don't disagree at all on that point. I simply don't see a mass movement to terminate dozens of employees per business or convert dozens of employees per business to part time work. The very survey someone posted above (ironically in an attempt to prove the opposite) pretty clearly shows that about 9/10 employers aren't going to fire dozens of people or reduce lots of hours. By and large employers are used to offering health care, and by and large this is an issue that businesses adjusted to a long time ago.

[snowcat]

You realize that read another way, 90% or more surveyed said they weren't making any changes at all or the question wasn't applicable, right?

Sure, but, based on the survey, ~20% of smallest businesses either have or plan to cut employees due to Obamacare, and ~20% of smallest businesses either have or plan to reduce hours due to Obamacare. Historically, where are the majority of new jobs created?

As stated above, the economy is currently creating "crappy" jobs and I would guess that jobs created by the businesses that are most likely to respond negatively to Obamacare are overrepresented in the current job growth.

"Crappy" jobs might also be called "entry-level" jobs. As is often the case with government programs and mandates, the unintended consequences hit the hardest on those they were intending to help.

[Surfah]

You realize that read another way, 90% or more surveyed said they weren't making any changes at all or the question wasn't applicable, right?

I genuinely laughed at that.