Obamacare cost...

[Pelado]

First, we can both agree you are not occupying the high ground and you don't really appear to contest that point here.

Second, I corrected my statement above on firing employees to include your other employee cost cuts (or cost avoidance) measures. I'm still waiting for an explanation as to why you think the only costs that can be cut in a business relate to employees as that seems to be the primary focus of your dispute with what I have said.

Third, I never once said businesses will just "shrug it off." I refer you back (and back and back) to my multiple posts stating that it will be quite difficult for them. But maybe this point was again to reinforce you are not occupying the high ground, in which case, good point.

If there were other, easier cuts for the business to make, why wouldn't the owner/manager have already made the cuts without regard to Obamacare?

[calicoug]

These are fixed costs, and are irrelevant to the question at hand, which is a variable cost calculation. This is one of the basic mistakes you see made by First Year Business students.

You are obviously a thoughtful and smart guy. It just looks like you never took a basic business class that would inform your arguments here. At the very least, you could speak the same language that others use here to refute their arguments.

I hope you never stop defending your positions here. You have a useful perspective that I don't get to see very much.

No, you just misunderstand my point. It isn't as simple as just "cutting employees" because there are many fixed costs that are factored in based on an estimate of the total employee workforce. The premise being floated here is that because employee healthcare costs are increasing, employers are left with only four options: 1) fire employees; 2) not hire workers (this isn't cost cutting, but it's not my argument either); 3) hire part time workers (also not cost cutting, but again...) and 4) cut hours. While two of those options would decrease variable costs, they won't touch fixed costs. Assuming this notion is correct and there are no other costs that can be cut (a silly premise, but the one your peers are advancing), employers will have to find a way to maintain margin and total sales (or increase margin with a decrease in sales) with fewer employees who presumably were engaged in some relevant business practices before they were laid off. So is that really the best place to cut? I suspect many businesses will say no and will look instead for other areas they would cut first before seeking to layoff employees. I'm frankly surprised nobody else here even thinks that's a possibility.

[calicoug]

If there were other, easier cuts for the business to make, why wouldn't the owner/manager have already made the cuts without regard to Obamacare?

Nope. There are always cost/benefit analyses performed depending on various inputs. If variable costs increase the cost/benefit analysis for many other things will change. For example, a company may do a lot of travel (perhaps lots of sales people). Maybe historically they fly people business class for trips over, say, 6 hours. Now they may say that they won't fly business class. They could have done this change before, but they chose not to because it was a nice perk for employees who were required to travel for the company. Maybe before they allowed employees to keep air miles and maybe now they want employees to use a corporate travel agency which applies all miles to the company's account (for additional free company travel). Maybe they take a look at insurance costs and decide that while they would prefer to keep a certain level of insurance, given the pressures they will decrease coverage slightly given they have a low history of claims anyways (or maybe they will move to self-insurance). Maybe they have a good relationship with a vendor who is a bit more expensive but they like the vendor and the customer service they get but now they will consider bidding out the work and seeing if they can get a better deal elsewhere.

If you don't think this happens routinely in businesses when unexpected costs are incurred, you just haven't spent much time in business.

[Pelado]

Nope. There are always cost/benefit analyses performed depending on various inputs. If variable costs increase the cost/benefit analysis for many other things will change. For example, a company may do a lot of travel (perhaps lots of sales people). Maybe historically they fly people business class for trips over, say, 6 hours. Now they may say that they won't fly business class. They could have done this change before, but they chose not to because it was a nice perk for employees who were required to travel for the company. Maybe before they allowed employees to keep air miles and maybe now they want employees to use a corporate travel agency which applies all miles to the company's account (for additional free company travel). Maybe they take a look at insurance costs and decide that while they would prefer to keep a certain level of insurance, given the pressures they will decrease coverage slightly given they have a low history of claims anyways (or maybe they will move to self-insurance). Maybe they have a good relationship with a vendor who is a bit more expensive but they like the vendor and the customer service they get but now they will consider bidding out the work and seeing if they can get a better deal elsewhere.

If you don't think this happens routinely in businesses when unexpected costs are incurred, you just haven't spent much time in business.

Business owners/managers are always trying to increase their net profit. The businesses that are most likely to incur additional expenses because of Obamacare are those with close to 50 employees who are not currently providing health insurance. I will certainly concede that some businesses will find a way to begin providing health insurance without laying off any employees or converting any to part-time.

Obamacare does, however, make it that much more expensive, even for these businesses, to hire any additional employees, and makes part-time employees more attractive than they would be without the new law. Any rational owner/manager must evaluate the business in terms of drivers - what drives revenue, what drives expenses. Obamacare makes every full-time employee more expensive than they used to be for these businesses. It is a disincentive to hiring full-time workers. You keep proliferating theories here that managers will look anywhere to cut expenses other than at the drivers of the costs. It just doesn't make business sense. It makes it look like you haven't spent much time in business management.

[Eddie]

I know it's just anecdotal, so perhaps it won't be seen as relevant.

But looking at the place where my son works seems to be a good example of the concern being expressed about Obamacare. There were a number of full-time employees as well as a number of part-time employees. The full-time employees were told that their hours on the job were going to be limited to a number that would not require the employer to pick up insurance. To fill the gap, additional part-time employees were hired.

Even if Obamacare were to go away today - I'm afraid that this particular employer is probably learning that the people who want to work full-time are also the most experienced, and while they need some of these folks to provide supervision for the folks with less experience - they are likely also learning that they can pay the lesser experienced part-time staff lower wages and save money twice by following this practice of moving the majority of their staff to part-time.

Cali - what is interesting to me about all of this is I expect that the skilled labor folks (read "white collar") are the folks that this is least likely to happen to. So the folks that are most effected are the blue collar folks with lesser skills and/or education. I don't have any research to back this up, but I suspect that the people who are in the lowest income brackets are the people who are ending up hurt the most.

[Omaha 680]

Nope. There are always cost/benefit analyses performed depending on various inputs. If variable costs increase the cost/benefit analysis for many other things will change. For example, a company may do a lot of travel (perhaps lots of sales people). Maybe historically they fly people business class for trips over, say, 6 hours. Now they may say that they won't fly business class. They could have done this change before, but they chose not to because it was a nice perk for employees who were required to travel for the company. Maybe before they allowed employees to keep air miles and maybe now they want employees to use a corporate travel agency which applies all miles to the company's account (for additional free company travel). Maybe they take a look at insurance costs and decide that while they would prefer to keep a certain level of insurance, given the pressures they will decrease coverage slightly given they have a low history of claims anyways (or maybe they will move to self-insurance). Maybe they have a good relationship with a vendor who is a bit more expensive but they like the vendor and the customer service they get but now they will consider bidding out the work and seeing if they can get a better deal elsewhere.

If you don't think this happens routinely in businesses when unexpected costs are incurred, you just haven't spent much time in business.

What is your business background? I am genuinely curious.

[Goatnapper'96]

What is your business background? I am genuinely curious.

GM of "FantasyLand?"

http://www.youtube.com/watch?v=YlVDGmjz7eM

[All-American]

I

First, we can both agree you are not occupying the high ground and you don't really appear to contest that point here.

Second, I corrected my statement above on firing employees to include your other employee cost cuts (or cost avoidance) measures. I'm still waiting for an explanation as to why you think the only costs that can be cut in a business relate to employees as that seems to be the primary focus of your dispute with what I have said.

Third, I never once said businesses will just "shrug it off." I refer you back (and back and back) to my multiple posts stating that it will be quite difficult for them. But maybe this point was again to reinforce you are not occupying the high ground, in which case, good point.

Never, ever did I say "only." Never. You have disembowled enough straw men in this thread to feed an army of cattle capable of generating enough excrement to match even your own output.

But you are correct on one point: Obamacare imposes burdens on the economy that have proven and will prove difficult to bear.

[calicoug]

I

Never, ever did I say "only." Never. You have disembowled enough straw men in this thread to feed an army of cattle capable of generating enough excrement to match even your own output.

But you are correct on one point: Obamacare imposes burdens on the economy that have proven and will prove difficult to bear.

Wait- what??? You have roundly criticized me for suggesting there are non-employee cuts that employers could make, noting that all of those cuts would have already been made if they existed. So what, pray tell, are you suggesting employers can cut other than the 2* cuts you have mentioned? Once you have itemized those, remind me what you have been arguing again. Your prior self will have some criticisms of your list.

*Still worth noting your other two suggestions aren't cuts.

[calicoug]

I

Never, ever did I say "only." Never. You have disembowled enough straw men in this thread to feed an army of cattle capable of generating enough excrement to match even your own output.

But you are correct on one point: Obamacare imposes burdens on the economy that have proven and will prove difficult to bear.

By the way, "burden on the economy" is different than "burden on business." The costs of healthcare must be borne by somebody. Obamacare is shifting some of those costs to employers and others it is subsidizing for individuals. That doesn't make it an "additional" burden on the economy though. So no, I don't agree. In fact, overall the bill will quite likely be beneficial for the economy.

[calicoug]

I know it's just anecdotal, so perhaps it won't be seen as relevant.

But looking at the place where my son works seems to be a good example of the concern being expressed about Obamacare. There were a number of full-time employees as well as a number of part-time employees. The full-time employees were told that their hours on the job were going to be limited to a number that would not require the employer to pick up insurance. To fill the gap, additional part-time employees were hired.

Even if Obamacare were to go away today - I'm afraid that this particular employer is probably learning that the people who want to work full-time are also the most experienced, and while they need some of these folks to provide supervision for the folks with less experience - they are likely also learning that they can pay the lesser experienced part-time staff lower wages and save money twice by following this practice of moving the majority of their staff to part-time.

Cali - what is interesting to me about all of this is I expect that the skilled labor folks (read "white collar") are the folks that this is least likely to happen to. So the folks that are most effected are the blue collar folks with lesser skills and/or education. I don't have any research to back this up, but I suspect that the people who are in the lowest income brackets are the people who are ending up hurt the most.

I don't necessarily disagree with you, insofar as your argument suggests that the hiring of part time individuals has little to do with Obamacare right now. We have a massive number of unemployed and underemployed individuals right now due to the tremendous job losses we saw during the past several years. Many of those people are attempting to return to the job market and it isn't surprising that many would be overqualified for the jobs that are available. That does skew employer hiring decisions, as you note. There's a long way to go yet before the country rebounds from the unemployment crisis we are passing through. The effects of the downturn are likely to be felt for many more presidencies.

[All-American]

By the way, "burden on the economy" is different than "burden on business." The costs of healthcare must be borne by somebody. Obamacare is shifting some of those costs to employers and others it is subsidizing for individuals. That doesn't make it an "additional" burden on the economy though. So no, I don't agree. In fact, overall the bill will quite likely be beneficial for the economy.

Bad for business, but good for the economy . . . . remarkable.

Wait- what??? You have roundly criticized me for suggesting there are non-employee cuts that employers could make, noting that all of those cuts would have already been made if they existed. So what, pray tell, are you suggesting employers can cut other than the 2* cuts you have mentioned? Once you have itemized those, remind me what you have been arguing again. Your prior self will have some criticisms of your list.

*Still worth noting your other two suggestions aren't cuts.

I have only one criticism of anything my prior self has said in this thread. Namely, I would retract what I said about how you couldn't possibly believe as you do with your head anywhere but in the sand. I'm less confident about that assertion now. It seems more likely that you just don't understand this stuff.

Nobody here is having any trouble understanding me but you. At this point, you either understand what I am saying and are deliberately misrepresenting me, or you don't understand what I'm saying and restating myself won't make a difference.

[il Padrino Ute]

If Obamacare is so damn terrific, why does Dear Leader continue to delay bits and pieces of it? Surely it isn't about political expediency.

http://www.nytimes.com/2013/08/13/us...agewanted=all&

[YOhio]

If Obamacare is so damn terrific, why does Dear Leader continue to delay bits and pieces of it? Surely it isn't about political expediency.

http://www.nytimes.com/2013/08/13/us...agewanted=all&

lol. You're reading the New York Times.

[Eddie]

I don't necessarily disagree with you, insofar as your argument suggests that the hiring of part time individuals has little to do with Obamacare right now. We have a massive number of unemployed and underemployed individuals right now due to the tremendous job losses we saw during the past several years. Many of those people are attempting to return to the job market and it isn't surprising that many would be overqualified for the jobs that are available. That does skew employer hiring decisions, as you note. There's a long way to go yet before the country rebounds from the unemployment crisis we are passing through. The effects of the downturn are likely to be felt for many more presidencies.

So - let me just disagree a little bit about Obamacare not playing a role.

I agree with your other statements. There are a number of unemployed people. Some are taking jobs that leave them underemployed. Others are taking jobs that are part-time to get their foot in the door somewhere while they look for a better situation long-term.

All that aside - at the place where my son works the people impacted are hourly workers. Some of them were attending college and would work full-time through the summer to sustain them through the school year when they cut hours back. Others were working full-time hours year round as their primary means of support. All were told that they would not be permitted to work above a certain number of hours each week going forward because the employer could not afford to provide insurance for them as is required by Obamacare.

So - while anecdotal and while I did cannot give you a count as to the number of individuals this directly effected - the reality is that Obamacare directly led to these individuals not being permitted to work the same number of hours they had in the past while the employer hired new employees to cover those hours and sustain the same amount of output.

I suppose this could be seen as a success in that some people were hired and became employed. But it should also be seen as a failure as it led to other individuals no longer having the means to support themselves.