Saturday, November 14, 2009

Obamacare's war on the Poor

There are, in public policies, these inconvenient things called the "secondary effects." These are the unintended consequences of even the best intended laws. Critics of Obama's national health care program have questioned its intentions from day one. Few doubt the program will lead to a serious rationing of health care (adding 40 million on the system and allegedly lowering spending will have that impact) and will lead to increase taxes for millions of Americans.

According to public opinion surveys, the number one issue of most voters is unemployment. This sentiment is backed up by the hard fact that unemployment recently broke into double digits, increased employment is still dragging, and the numbers added to the dole are still in the hundreds of thousands each month. One of the main deterrents to the creation of jobs is taxes. Obamacare is nothing short of a direct tax on labor and the cheapest labor in particular.

Writer Eric Staib has spent some serious time with this massive legislation that will change health care and the economy forever. He points out that "According to pages 269-273 of the gargantuan bill, employers of full-time workers will be required to cover at least 72.5 percent of the premium of the least expensive health-insurance plan available that fulfills the bill's minimum criteria of 'acceptable coverage.' In cases in which family coverage is provided, 62.5 percent of the premium is to be borne by the employer. Depending on the specific plan and other variables such as location, this amounts to a direct labor tax of approximately $300 per month for an individual, or nearly $700 for family coverage." Simply put, that means an additional cost of $300 a month for adding an employee and more than twice that if he or she has a family. This, of course, leads to discrimination of potential employees if they have a family.

To make matters worse, if adding $300 or $700 to a preexistent employee and the return being given back to the company is worth less than that, he or she might be laid off or find themselves part time. That leads to another problem, Obama's bill leaves the definition of part-time in terms of the health care bill to Obama's Czar on the subject and not the Department of Labor. The lower the number of hours are used in defining part-time, the fewer the hours people will have at a job. It will create a devastating cycle.

The political left claims to hate regressive taxes (those that get higher as you make less income), but that is exactly what this bill promises to be. The less productive (lower paid) employee will be the one in the business decision makers' crosshairs. Instead of improving the lot of those who are in need of national health care, this legislation promises to do them more harm by also making them unemployed or under employed.

Another unintended consequence of this bill, but certainly tied in to it, will be the continued growth of outsourcing to foreign countries as a viable way of doing business. Cheap labor that is around the world will be a more attractive source for getting things done. Instead of helping the working poor and those who aspire to rise up the economic ladder, Obamacare promises to make the "working poor", simply "poor."

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

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