Is Obamacare Stopping Businesses From Hiring?

Businesspeople certainly think so.


President Obama says his health care "reform" will be good for business.

Business has learned the truth.

Three successful businessmen came on my Fox Business show last week to explain how Obamacare is a reason that unemployment stays high. Its length and complexity make businessmen wary of expanding.

Mike Whalen, CEO of Heart of America Group, which runs hotels and restaurants, said that when he asked his company's health insurance experts to summarize the impact of Obamacare, "the three of them kind of looked at each other and said, 'We've gone to seminar after seminar, and, Mike, we can't tell you.' I think that just kind of sums up the uncertainty."

Brad Anderson, CEO of Best Buy, added that Obamacare makes it impossible to achieve even basic certainty about future personnel costs:

"If I was trying to get you to fund a new business I had started and you asked me what my payroll was going to be three years from now per employee, if I went to the deepest specialist in the industry, he can't tell me what it's actually going to cost, let alone what I'm going to be responsible for."

You would think a piece of legislation more than a thousand pages long would at least be clear about the specifics. But a lot of those pages say: "The secretary will determine …" That means the secretary of Health and Human Services will announce the rules sometime in the future. How can a business make plans in such a fog?

John Allison, former CEO of BB&T, the 12th biggest bank in America, pointed out how Obamacare encourages employers not to insure their employees. Under the law, an employer would be fined for that. But the penalty at present—about $2,000—is lower than the cost of a policy.

"What that means is in theory every company ought to dump their plan on the government plan and pay the penalty," he said. "So you don't really know what the cost is because it's designed to fail."

Of course, then every employee would turn to the government-subsidized health insurance. Maybe that was the central planners' intention all along.

An owner of 12 IHOPS told me that he can't expand his business because he can't afford the burden of Obamacare. Many of his waitresses work part time or change jobs every few months. He hadn't been insuring them, but Obamacare requires him to. He says he can't make money paying a $2,000 penalty for every waitress, so he's cancelled his plans to expand. It's one more reason why job growth hasn't picked up post-recession.

Of course, we were told that government health care would increase hiring. After all, European companies don't have to pay for their employees' health insurance. If every American employer paid the $2,000 penalty and their workers turned to government for insurance, American companies would be better able to compete with European ones. They might save $10,000 per employee.

That sounded good, but like so many politicians' promises, it leaves out the hidden costs. When countries move to a government-funded system, taxes rise to crushing levels, as they have in Europe.

Whalen sees Obamacare as a crossing of the Rubicon.

"We've had an agreement in this country, kind of unwritten, for the last 50 years, that we would spend about 18 to 19 percent of GDP (gross domestic product) on the federal government. This is a tipping point. This takes us to 25 to 30 percent. And that money comes out of the private sector. That means fewer jobs. This is a game-changer."

He means it's a game-changer because of the cost. But the law's impenetrable complication does almost as much damage. Robert Higgs of the Independent Institute is right: If you wonder why businesspeople are not investing and reviving the economy, the answer lies in all the question marks that Obamacare and other new regulations confront them with. Higgs calls this "regime uncertainty."
It's also what prolonged the Great Depression.

No one who understands the nature of government as the wielder of force—as opposed to the peaceful persuasion of the free market—is surprised by this.

NEXT: 15 Years After Prop. 215, California's A.G. Wonders Where Patients Are Supposed to Get Their Marijuana

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  1. 6 Months ago, I sat in a seminar given by Paychex for small business owners that was intended to inform them as to how the law was going to impact them.

    These owners are using PAychex as an outsourced HR Department. Essentially Paychex is paid a nice sum of money to tell the employer what to do to comply with the law, filing paperwork on their behalf, etc.

    The person giving the presentation refused to answer questions. Essentially, the law was so vague, and the interpertations such a movig target, that she was afraid that anything she said that wasn’t in the script approved by her company’s lawyers would expose them to significant liability.

    The abject cluelessness that the leadership of the Democratic Party has as to how labor markets work was in full display in that meeting.

    They all but told business owners not to hire additional people until the law got sorted out. And, this is in MA which already has the neutron bomb called Romney Care ravaging the economy.

    1. Well, at least the law created jobs, right? See, broken windows do help the economy!

      1. If Krugman really believes in broken windows creating jobs, would it be wrong to break bones of his to create more jobs?

        1. You’re not the government, so he can’t understand you.

          1. Can’t we get the government to do it? There’s got to be a rule he broke somewhere.

  2. But a lot of those pages say: “The secretary will determine …” That means the secretary of Health and Human Services will announce the rules sometime in the future. How can a business make plans in such a fog?

    Is this kicking the can down the road, or is it leaving regulations open-ended enough that if a certain person or industry needs an advantage, the Administration can give it to them through the HHS Sec?

    Negligence or cronyism? Incompetence or corruption? I can see any motivation being plausible.

    1. The Devil’s Kitchen characterizes them as mini-enabling acts.

      I think it is wholly appropriate.

    2. I think it just means they can fill in the blanks when they get a “donation” to “help them figure it out”.

    3. Is this kicking the can down the road, or is it leaving regulations open-ended enough that if a certain person or industry needs an advantage, the Administration can give it to them through the HHS Sec?

      Why can’t it be both?

    4. A little from column A and little from column B.

      Usually things like “health care reform” have all manner of unintended consequences that the legislators didn’t anticipate, but in this case the unintended consequences are so obvious to anyone with half a brain that I have trouble believing that they didn’t see them coming.

      On the other hand by Nancy “we have to pass it so we can see what’s in it” Pelosi’s own tacit admission they apparently didn’t even read the bill. Either that or they did read it and couldn’t even understand it themselves, or they knew full well that they were passing an “enabling act” that would allow a department of the executive branch to make shit up as they went along later.

      Any way you slice it it’s fucking ridiculous.

  3. “Obamacare encourages employers not to insure their employees. Under the law, an employer would be fined for that. But the penalty at present?about $2,000?is lower than the cost of a policy”

    -good news

      1. I thought it was only a joke, but you do seem to suffer from some kind of lack of medication.

        1. Oh my little coward anon, you likely do not have a resource of creativity to understand. Go back to your video games

          1. Delusions of grandeur too, apparently.

            1. Zeb, failure or pompousness; which would you choose?

              Wait, I’m psychic; I can guess

          2. Which one of the other personalities made you post today?

            1. C’mon…call someone a poodle.

  4. wonder what shitbag Tony has to say about this?

    1. Probably some crap about “the greater good” (not fessing up that the greater good is behind every mass tragedy ever committed on man) and then a lecture about how his system is being more moral (and then bitching about right- wingers legislating their brand of morality).

      1. We meant well.

  5. Have you seen this ad yet?

    It’s a thing of fucking beauty.

    1. That is great! Thanks for sharing. Ron Paul’s team is making some great ads.

      1. It’s not his team — it’s an organization supporting him, but it’ an awesome ad.

    2. Excellent. I had to watch it on mute as I’m at work, but even so, that was spot on. Ron’s campaign is getting significantly slicker, but not all in a bad way.

      1. The announcer was basically just reading the text. You missed nothing except for the intonation.

        1. Actually, I thought the voice was annoying for the first 10 seconds, but then when it gradually became over the top dramatic…that’s when I said to myself, now that’s a fucking campaign ad.

    3. Pretty dramatic. I dig these ads the Ron Paul camp is producing. It would be nice to see an ad that featured the benefits of free trade, etc. People get desensitized to scary/ overly dramatic political ads.

    4. I can’t possibly justify voting for Ron Paul, Juice. Fuck him. He keeps giving inadequate answers to questions concerning those 20-year-old newsletters, and clearly, we can’t have a President that’s a racist and tries to hide it. I was convinced that he doesn’t deserve my vote, my support, because of those newsletters after watching this:

      It all makes sense now — ROMNEY 2012!

        1. Yep

    5. That could win some serious Democratic crossover votes.

    6. Wow – that blew me away.

  6. alt-text:

  7. Tony…….You must be happy your Gram got Health care and the government found yet another way to control the economy

    1. We’re chock-a-block with Adam Smith’s “men of system.”

  8. Corporations that offer a benefits package don’t notice the new law. Likewise small businesses under 50 are not affected.

    The ones complaining tend to be large companies that hire minimum wage workers and don’t offer a group plan. Fuck them – even McDonald’s offered their snot-nosed teen employees a bare bones group option for them to PURCHASE.

    A large corporation who sends their hourly workers to Medicaid are scum.

    1. yep, business WANTS to unload their employees’ health care costs onto the taxpayer…just like big steel did.

      1. Hasn’t the left wanted that for ages? Don’t they praise Japan and most of Europe for their national healthcare and the resulting positive effects on business competitiveness since now the public is partially subsidizing its labor costs?

      2. Shouldn’t employee health care costs be paid by, gee, the employee?

        1. No, that’s the sort of shit neo-Confederate tea-baggers spew, dude. Get a clue, man, and vote CPUSA TO-DAY!

        2. That’s crazy talk!!

        3. What is this, some kind of communist dictatorship?

    2. “The ones complaining tend to be large companies that hire minimum wage workers and don’t offer a group plan. Fuck them…”

      The minimum-wage earners who now won’t get hired?
      Boy, you really know how to stick it to the MAN!

    3. Iknowright?? Don’t these evil corporashuns know healthcare is a right??

    4. Corporations do not send hourly workers to Medicaid.

      Anyone who doesn’t want to work for an hourly wage with no benefits has the option to quit their job and work for someone else. For example, Starbucks has a generous health plan once you’ve been on the job 3 months.

      1. But what about the poor suffering people who can’t be bothered to show up every day and can’t keep a job for 3 months? Don’t they have rights too?

        1. They have the right to bear the consequences of their lack of personal responsibility.

          1. What does personal responsibility even mean?

            1. OK, that’s a funny spoof.

    5. I can tell you for a fact that large corporations do notice the new law. Many are already reducing the number options they offer their employees. At the company I work at as well as the one my wife works at (both large aerospace/ defense companies btw) they’ve definitely noticed. My company only offers either a high deductible plan or a lousy HMO based plan. My wife’s company offers either an HMO plan or something they call the “Total Health Plan” which is some kind of self insured plan (not sure of the specifics).

      I suspect that is the case with other large corporations as well, and I can only guess that a big reason why is after 2014 they will only really be allowed to offer one “government approved” health plan, or drop coverage altogether; so they’re easing their employees into the transition by gradually taking away choices.

      Small businesses under 50 employees are affected. If you own a small business and want to expand, you can’t grow past that magic 50 employee mark or face the wrath of Obamacare regs.

      As for corporations who “send their hourly workers to medicaid” I can only assume your refering here to minimum wage workers who don’t get benefits. All I can say to that is – so what? Minimum wage jobs are literally jobs that any bum off the street could walk in and do, which is why employers don’t have to treat their workers that well. They know that if their people quit, they can literally hire anyone to replace them. If you’re not an unskilled immigrant or under the age of 18 and you’re still working a minimum wage shit job, try going to trade school or enlisting in the military and learning some useful valuable skills that could lead to a higher paying job.

      But it’s easier to whine and bitch and beg for gov’ment help than to get off one’s ass and try to make a better life for oneself.

      1. I wish Thor would just kill you already.

        1. Of course you do. Brain-dead lefties always prefer violence and death.

          1. Of course you do. Brain-dead lefties always prefer violence and death.

            It’s been my experience that modern Scandanavians are more the passive-aggressive type as opposed to the bloodthirsty ransacker type.

            1. Somehow, I’ll bet when you don’t pay the taxes, the ‘passive’ goes by the way side.

        2. Way to offer up logical and well thought out counter points…

          1. I’m menstruating.

  9. Corporations that offer a benefits package don’t notice the new law.

    I can assure you from perch in one of those organizations, this is not true.

    A large corporation who sends their hourly workers to Medicaid are scum.

    So, what do you say to a Congress that encourages them to do so?

    1. well, since most cover their employees, what do you say?

      1. If/when I get to the point of having employees, I will have quite a few more reasons not to offer coverage.

        (In addition to the myriad of reasons the government’s giving me to avoid hiring anyone who’s not an investment partner or family member.)

      2. I’m not the one characterizing corporatiosn who react rationally to Congressional incentives as scum, so I don’t really have to say anything, do I?

  10. Scumbag Stossel: Congress destroys 4th amendment… Continues to harp on Obamacare.

  11. I met a communist today. I had to smile and nod at everything he said, since it was for work, and I had to really, really exert my power of self-control to avoid cringing the muscles out of my face, smashing my head against a wall in disbelief, or running away and diving under a train.

    A 37-year-old Chinese immigrant. Radical Marxist-Leninist.

    And he loves the idea of ObamaCare as a stepping stone.

    And I hope I never have to deal with fuckers like that again.

    1. Joke names fu

    2. I wonder why he emigrated from China?

      1. And not to, say NK.

      2. To get into a more marxist environment?

    3. Reminds me of my time in the QA dept of a pharmaceutical company when I had to be nice to the FDA inspectors who denied hundreds of kids in the U.S. w/ a genetic disorder access to our lifesaving medicines dooming the kids to lingering, painful deaths.

      I had to tell those sociopaths that I was happy to meet them. I did the right thing by our customers and kissed up to the monsters, but I felt like crap doing it.

      1. A lot of it is just that: People “being nice” to inspectors for the sake of it since they hold an inappropriate amount of power. If you’re not nice, you get no goodies.

        I do it every other day in my business. It’s basically a “wtf” moment every single time.

        Sad, really.

        Meh. For the “greater good” I’m told. Now that I’ve owned two businesses and set to hit the 40 year-old mark, I can see what kind of a bull shit myth it really is. No one gives a shit – let alone a fucking bureaucrat.


        And yes, I’m apt to accept the belief (surprise, surprise), that every regulation in place only serves to erode wealth. It hampers you in ways the average person can’t imagine. For example, my payroll taxes equal an amount I could easily shift to an employee. An ENTIRE month’s salary!

        Now calculate that across the board for all small businesses. If there are 4000 businesses, that means (it can be argued) 4000 jobs may not be optimized. It’s not just that. More money means more cash flow. More cash flow means you can reinvest and grow still more. Hence, you hire more as you grow.

        It’s not fucking rocket science.

        Yet, to liberals, it doesn’t seem to register with them that each time they advocate a welfare program (well, at this point, more like an enabling program), IT COSTS MONEY. LOTS OF IT.

        1. Kind of like someone with an expensive, incurable health problem meeting a libertarian. “Yeah, you’d have to commit suicide, being unable to afford your drugs, but don’t you see how free I’d be?”

          1. Hm.

            Are you correlating and/or conflating payroll taxes to universal health care?

            There’s a difference between payroll, personal and coprorate income taxes.

            I see where my payroll taxes go and universal health is not one of them. It’s for other social costs. Now graduated into entitlements.

  12. Great argument for Medicare for all, Stossel.

    1. Sarcasm? Stupidity?

    2. I know! Paying higher taxes is the way to go! What could possibly go wrong with more entitlements?

      1. “What could possibly go wrong with entitlements” is that the taxpayer gets stuck with the sick and the old while private industry gets to cherry-pick the young and healthy for profit. Unify the risk pool, and the taxpayer benefits from having the young and the healthy in the same pool as the old and the sick.

        1. Shorter stupid:
          “It’s only half-way screwed up now! We want to screw it up entirely”

  13. Is Obamacare stopping businesses from hiring? No, Obamacare is making businesses hire. If anything, NOT having Obamacare was stopping businesses from hiring.

    1. Is Obamacare stopping businesses from hiring? No, Obamacare is making businesses hire.

      Employment to population ratio says otherwise.

    2. Is Obamacare stopping businesses from hiring? No, Obamacare is making businesses hire. If anything, NOT having Obamacare was stopping businesses from hiring.

      Repeat the Lie enough and it will become fact.

    3. It’s a shame you have neither the objective reasoning nor the empirical evidence to back that up.

      1. The “empirical evidence” on either side is weak, just scattered surveys of employers.

        Without adequate research, defer to common sense [i.e. the ACA makes it completely impossible for employers to estimate their costs in two years, so hiring any new employees is a catastrophically stupid decision]

    4. Tony|12.22.11 @ 2:28PM|#
      “Is Obamacare stopping businesses from hiring? No, Obamacare is making businesses hire.”

      Shithead, one half-truth, one lie.

    5. Spoof.



      Yeah, must be.


    6. There is way to much stupid in that comment for it to not be a spoof.

  14. Except a small point… it hasn’t taken effect yet.

    1. So you think it’ll get worse?

    2. So do you think it’ll get worse?

    3. Except a small point… it hasn’t taken effect yet.

      It most certainly has, in part. Its phased in, and phase one went into effect the day it became law.

    4. Read my comment at the top, muffles. It’s already having an effect.

    5. Whooosh! Missed me again!

    6. Another comment with way too much stupid in it.

  15. Not sure about yours, but it’s kept (keeping) mine from hiring anyone. Fact is, I turned away from a contract that would have required adding jobs, and I actually layed off some hourly to trim the force and hunker down. To spill all my guts I’ve tested the waters to entertain a buyout. I can feel the fucking comming.

  16. Stossel: If you want to better communicate libertarian ideas to liberal-minded types, I suggest that you’ll be better off using the term “businesspeople” or “business owners” instead of “businessmen”. The latter makes you sound like you come from the 1950’s. Just a minor nitpick – the rest of it is quite well done.

    1. Any liberal that dismisses Stossel’s argument based on an irrelevancy like that probably isn’t going to be convinced anyway, even if he used “business-being of vibrant diversity.”

      1. I have a dog of ‘diverse pedigree’.

      2. This liberal has said “businessmen” as long as I can remember. What a stupid fucking thing to complain about.

  17. Let me get this straight!

    We passed a health care planwritten by a committee whose head says he doesn’t understand it,
    passed by a Congress that hasn’t read it but exempts themselves from it,
    signed by a president that also hasn’t read it, and who smokes,
    with funding administered by a treasury chief who didn’t pay his taxes,
    overseen by a surgeon general who is obese,
    and financed by a country that’s nearly broke.

    What possibly could go wrong

    1. I’m stealing that and passing it on!
      How should I credit it?

    2. Uh, what? What part is Congress “exempt from” exactly?

      The Medicare reforms? The fee if you don’t have health insurance?

  18. Fragile skinny with milky white skin and tons of attitude, Olena is the kind of girl who always gets noticed. A truly cosmopolitan girl, this young firecracker is well traveled, funny, stylish and if we are honest, a little bit crazy!

    Tomboy Olena loves her US truck caps and converse shoes but also has an appreciation for ultra sexy lingerie! In line with her anarchic attitude she loves punk music and lots of sex. And throughout the shoot she chomped on protein rich crabsticks to help maintain that lean and mean body of hers!

    Oozing sex appeal and a little bit wild, Olena is the kind of girl your mother warned you about ? you have been warned!

    1. “she chomped on protein rich crabsticks”
      Is that the current slang?

      1. I’ll leave that for you to decide, but the ansewer is yes.

        1. shes a very nasty girl….

  19. This article is written in excellent manner, great work

  20. All mah rowdy friends are comin’ over to watch Sunday Night Football toniiiite! Go Pack.

  21. Imo, this Obamacare issue is a drop in the bucket compared to FATCA. Read a few articles and its estimated that this move could cost us up to 10 million jobs. Many countries such as Switzerland, Australia, and Canada are protesting. Swiss Banks have already said “Farewell America”.

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