Laboring for Unemployment

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When you make it harder to hire people—as Obamacare does by imposing penalties on companies that fail to provide specified health insurance—you make it more unlikely that persons will be hired.

Consider the case of Automation Systems Inc., reported at National Review Online. After the economy went into a nose dive a few years back, the only way owner Carl Schanstra could keep the company alive was by slashing staff.

Automation Systems has managed to bounce back, and business is improving. Currently, Schanstra employs 37 people. He would like to hire lots more. But as soon his company employs more than 50, he’ll be socked with $40,000 in penalties and $2,000 for each additional employee. Even firms that already provide health care to employees will have to pay such penalties if they have 50+ workers and their insurance plans don’t offer as much coverage as Obamacare deems necessary.

When you must shell out $40,000 to the government—$40,000 more than all hitherto expected payout of salary and benefits—to hire your very next employee, you have a strong incentive to keep your company smaller than you might have liked. And workarounds like contracting consultants, as discussed last week, are not options for every company.

This reality may seem obvious to anyone with even modest knowledge of what it takes to create wealth and make a living. But somehow the obvious escapes the central planners in Washington.

Or maybe they just don’t care about the hardships their policies impose upon us.

This is Common Sense. I’m Paul Jacob.

3 Comments so far ↓

  1. Jan
    29
    11:22
    AM
    JFB

    The planners in Washington clearly understand that they are creating additional hardships and burdens. They simply underestimate their effect, and have NO idea or concern about the long term consequences if it is beyond the next election cycle.
    Additionally, if you can keep enterprise below 50 employees that should be helpful in reducing the business lobby and its political contributions, as helpful in ridding us of the repugnant 1%.

  2. Jan
    29
    11:50
    AM
    drrik

    If economic collapse is the apparant goal and civil unrest (that the government is PLANNING for on a masssive scale) is also a part of that goal, then what is the plan for after that? What is the “and then they lived happily ever after” part of the plan?

    Hisorically, the citizens do not treat kindly those in charge when a country collapses.

  3. Jan
    29
    1:59
    PM
    Karen

    Once again, you concisely hit the nail on the head. I’m no math whiz or financial consultant, but I can understand that increasing taxes if your company grows kills the incentive to do so. Obama Care has increased jobs in the medical realm. My GP’s office had to hire someone to go through the regulations & the additional paperwork that will now be necessary to bill the gov’t. Many of the other doctors in the practice plan to charge their patients a yearly fee of $300 to fill out said documentation. What a travesty & I think the bulk of Americans still think this is all a great idea.

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