Tag Archives: Underemployment

News

Obamacare causing local governments to eliminate jobs and cut back on worker hours

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This is the top article on Investors Business Daily at the time of writing.

Excerpt:

[W]hile private companies are getting all this unwelcome and hostile attention, local governments across the country have been quietly doing exactly the same thing — cutting part-time hours specifically so they can skirt ObamaCare’s costly employer mandate, while complaining about the law in some of the harshest terms anyone has uttered in public.

The result is that part-time government workers — many of them low-income — face pay cuts that can top $3,000 a year, and yet will still be left without employer-provided benefits.

Here is just a small sampling of local news reports about what local government officials are saying about ObamaCare, and the steps they’re taking to avoid or minimize its costs.

[…]Dearborn, Mich.: “If we had to provide health care and other benefits to all of our employees, the burden on the city would be tremendous,” said Mayor John O’Reilly, explaining why the city is cutting its more than 700 part-time and seasonal workers down to 28 hours a week. “The city is like any private or public employer having to adjust to changes in the law.”

Indiana: “What I’m seeing across the state is school districts, unfortunately, having to reduce the hours that they are having some of their folks work, primarily so they don’t have to worry about the (ObamaCare) penalties, or they don’t have to provide them health insurance, which would be very, very costly,” said Dennis Costerison, executive director of the Indiana Association of School Business Officials. Ft. Wayne Community Schools, for example, are cutting yours for nearly three-quarters of its part-time aides.

Omaha, Neb.: “The biggest problem is everyone said that ObamaCare is only going to help cut costs. Nothing could be further from the truth,” said Mike Kennedy , who serves on the board of Millard Public Schools, just outside the city, and figures ObamaCare will raise its costs by $400,000. A neighboring school district is reducing hours for up to 281 part-time employees to avoid $2.5 million in new costs, which will result in pay cuts of up to $3,300.

Long Beach, Calif.: “We are in the same boat as many employers,” said Tom Modica, Long Beach’s director of government affairs. “We need to maintain the programs and service levels we have now.” So the city is going to cut hours for 200 part-time workers so it doesn’t have to pay $2 million to provide health benefits.

Salt Lake City, Utah: “With new provisions in the Affordable Care Act, there was going to be a significant burden upon Granite School District and our taxpayers to offset the cost of benefits,” said spokesman Ben Horsley. He says covering the district’s part-time workers would cost about $14 million, and so about 1,000 will have their hours cut to 29 a week.

[…]Virginia: “The Commonwealth of Virginia is grappling with the same issues that many businesses in the private sector are as they struggle to deal with the costs imposed by the Affordable Care Act,” Paul Logan, a spokesman for Gov. McDonnell, said. The state is requiring that about 7,000 part-time government workers put in no more than 29 hours a week.

Texas: “The Affordable Care Act has added so much complexity and administrative burden that there is nothing affordable about it,” said Jared Pope, who is consulting with Texas municipal governments on ObamaCare. Dallas expects its health costs to climb $2.1 million next year. Plano is cutting hours to avoid $1 million in new costs.

Kern County, Calif.: “It will affect multiple departments, a majority of departments,” said the county’s deputy administrative officer Eric Nisbett, explaining that unless the county cut worker hours for 800 employees, ObamaCare would cost it up to $8 million a year.

Allegheny County, Pa.: “There’s frustration and anger and sadness and resentment, you know, but you don’t have a voice,” said adjunct English professor Clint Benjamin in the wake of the Community College of Allegheny County’s decision to cut hours for about 400 adjunct faculty and other employees so it wouldn’t have to pay $6 million in ObamaCare-related fees next year.

Medina, Ohio: “We feel bad as a city administration and as a council in having to cut hours from 35 to 29,” Medina Mayor Dennis Hanwell said. “We have the budget to pay the people, but we do not have the budget to pay for the health care.” If they hadn’t made that cut, the city faced up to $1 million in new health costs courtesy of ObamaCare.

It’s not just private companies who are cutting back on hours in order to escape being forced to pay for health insurance. I think I can pretty much guarantee that no one on the left thinks about where money comes from when they are giving these speeches about how much they care about everyone and how they will give everyone free money. The truth is that if you have a job, you are paying for people who don’t have jobs so that they can have the same life that you have without having to work. That’s what progressivism means. Equality regardless of wisdom and prudence.

News

Real unemployment rate for youth is 22.9%

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I found an article  from the Wall Street Journal via Lonely Conservative in Captain Capitalism’s latest round-up .

Excerpt:

When the recession began in December, 2007, 59.2% of the under-25 population was in the labor force, meaning they were either working or looking for work. Today, that figure has fallen to 54.5%. That may not sound like a big drop, but it makes a huge difference. If the so-called participation rate had remained unchanged, there would be 1.8 million more young people in the labor force today than there actually are. Counting those people as unemployed, rather than out of the labor force, would push the unemployment rate up to 22.9%. That’s only a hair better than the 23.9% youth unemployment rate in the euro zone, and has shown only very modest improvement during the recovery.

The decline in the participation rate among the young can’t all be attributed to the recession. Labor force participation among young people peaked at just under 70% in 1989, and has trended downward ever since, primarily due to rising rates of college attendance.

The decline accelerated during the recession, as many young people sought refuge in college or other forms of education or training. In a normal cycle, that might have worked out well, leaving a generation of highly educated workers ready to re-enter the job market when the economy recovered. Instead, they have been graduating into a labor market that remains deeply challenged, especially for those without much work experience. To make matters worse, many graduates are carrying hefty debt burdens, and those who can find work are often being forced to low-skill jobs.

But are these young people victims? Or are they doing this to themselves?

Young UK socialists rejoice over Maggie Thatcher's death
Young UK socialists rejoice over Maggie Thatcher’s death

I was looking over the Captain’s blog and I found a post where he argues that young people are not victims.

He writes:

However, before we all jump on the baby boomer generation (and don’t worry, history will be INCREDIBLY harsh on them) we have to look at our own generational selves in the mirror.  Specifically, whether we deserve all these programs or not.

Of course, the question is moot and academic.  I don’t think there will be any money to be paid out in the first place, but let’s just say there was.  Do our generations really deserve all the unicorns, puppies, hope, and change the government says we’re entitled to?  I say no and here is the reason why.

Gen X and Gen Y are doing the EXACT same thing as their baby boomer predecessors did.  They are spending more money than they make.  They expect other people to take care of themselves.  They are entitled WAY more than the baby boomers ever were.  And (most importantly) THEY VOTED IN DROVES FOR BARACK OBAMA and thus THE MORTGAGING OF THEIR OWN FUTURES.

Much as I loathe the baby boomers, the successive generations, mine included, are worse.  Despite BLATANT and OBVIOUS financial problems our generations faced, we lacked the adult maturity (let alone simple 2nd grade mathematics) to turn this country around.  And while the baby boomers have been voting more and more conservative, it is the younger generations through galactic stupidity, ignorance and selfishness that merely nailed a couple more nails in the US-coffin and thus our own futures.

Like I said, I doubt there will even be any money for Gen Y, Gen X and any future generations to make good on all those socialist entitlement goodies we promised ourselves.  But before we start blaming previous generation’s for our current problems, we should start blaming ourselves for making our future problems worse.

We should be careful about pitying young people who are struggling to find work, and who won’t get a dime from social programs like Social Security and Medicare. They are voting to punish employers with taxes and regulations. Most of them don’t know or care about what they are doing – they don’t connect their vote to their unemployed status. They think that education means jobs, and that they can vote in order to feel good and be liked, and still find work. They think that if they pay into these entitlement programs, then the money will be there. They trust Obama and they vote for him. They are not victims.

News

How the new Obamacare mandates are reducing full-time employment

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From the Wall Street Journal.

Excerpt:

Here’s a trend you’ll be reading more about: part-time “job sharing,” not only within firms but across different businesses.

It’s already happening across the country at fast-food restaurants, as employers try to avoid being punished by the Affordable Care Act. In some cases we’ve heard about, a local McDonalds has hired employees to operate the cash register or flip burgers for 20 hours a week and then the workers head to the nearby Burger King or Wendy’s to log another 20 hours. Other employees take the opposite shifts.

Welcome to the strange new world of small-business hiring under ObamaCare. The law requires firms with 50 or more “full-time equivalent workers” to offer health plans to employees who work more than 30 hours a week. (The law says “equivalent” because two 15 hour a week workers equal one full-time worker.) Employers that pass the 50-employee threshold and don’t offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. So by hiring the 50th worker, the firm pays a penalty on the previous 20 as well.

These employment cliffs are especially perverse economic incentives. Thousands of employers will face a $40,000 penalty if they dare expand and hire a 50th worker. The law is effectively a $2,000 tax on each additional hire after that, so to move to 60 workers costs $60,000.

A 2011 Hudson Institute study estimates that this insurance mandate will cost the franchise industry $6.4 billion and put 3.2 million jobs “at risk.” The insurance mandate is so onerous for small firms that Stephen Caldeira, president of the International Franchise Association, predicts that “Many stores will have to cut worker hours out of necessity. It could be the difference between staying in business or going out of business.” The franchise association says the average fast-food restaurant has profits of only about $50,000 to $100,000 and a margin of about 3.5%.

Because other federal employment regulations also kick in when a firm crosses the 50 worker threshold, employers are starting to cap payrolls at 49 full-time workers. These firms have come to be known as “49ers.” Businesses that hire young and lower-skilled workers are also starting to put a ceiling on the work week of below 30 hours. These firms are the new “29ers.” Part-time workers don’t have to be offered insurance under ObamaCare.

[…]A 2012 survey of employers by the Mercer consulting firm found that 67% of retail and wholesale firms that don’t offer insurance coverage today “are more inclined to change their workforce strategy so that fewer employees meet that [30 hour a week] threshold.”

The biggest problem I have with these socialist policies like Obamacare is that they often affect people who didn’t vote for Obama. It wouldn’t bother me at all if only Democrats were harmed by Democrat policies. But I don’t like it when innocent people who didn’t want these policies have to suffer the consequences of Democrat policies. Maybe we just need to be better at explaining things to Democrats using very simple words before the next election, so that they can vote for competence and results instead of voting for charisma and rhetoric.