Two surveys of regional employees—“one focused on manufacturing businesses, one on service companies”—conducted by the Federal Reserve Bank of New York reveals just how much Obamacare promises to stagnate job growth.
The survey found that “33.3 percent of service firms said Obamacare was increasing their costs “a lot,” whereas 51.2 percent of manufacturing firms said the same.” Additionally, “16.9 percent of service firms and 21.6 percent of manufacturers said they would be reducing their workforce due to Obamacare. 21.8 and 20.5 percent, respectively, said they would be reducing wage and salary compensation. 25 and 36.4 percent, respectively, said they would be raising prices for their customers.”
According to Forbes, there are three important explanations for the survey’s results including the facts that:
- “Obamacare is one of the largest tax increases in U.S. history”
- “Obamacare increases the cost of employing workers”
- “Obamacare’s exchange subsidies encourage many workers to drop out.”
First, Obamacare will increase taxes by $1.2 trillion over the next decade. The tax increases includes a “3.8 percent surtax on investment income for high earners and businesses filing as individuals.” The latter of the tax’s targets is especially important because “54 percent of the private-sector workforce is employed in “flow-through” businesses whose income is subject to the individual income tax rate.” This means that “affected businesses will have to make up the difference by either hiring fewer workers, or charging higher prices for their goods and services, or both.”
Second, Obamacare is set to increase the cost of employing workers due to the law’s “notorious employer mandate, requiring all businesses with more than 50 full-time-equivalent employees to offer federally-certified health coverage, or pay steep fines.” The more than 50 employee stipulation, predictably, encourages businesses keep employee numbers low and seek alternative means to limit the human workforce—including self-service checkout options.
Third, Obamacare subsidies encourage workers not to seek or maintain employment. Half of the working population is eligible for Obamacare subsidies that are “roughly equivalent to doubling both employer and employee payroll tax rates…” There is a clear disincentive to work.
Forbes concludes that, to spark job growth, Obamacare must be repealed.