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News-Sentinel.com Your Town. Your Voice.
Opening Arguments

Yeah, affordable, right

If the government is going to make it costlier to hire people, then businesses are going to hire fewer people. Simple economics, right?

An Indiana businessman told lawmakers Wednesday he has purposely kept his companies small to avoid having the number of workers that would require him to provide health insurance under the Affordable Care Act.

“We have felt the profound imposition of the Affordable Care Act or, as it is known among many small-business entrepreneurs, the Unaffordable Care Act,” said Joe Sergio, president of The Sergio Corp., a South Bend parent company of a disaster restoration business and an industrial cleaning company. “Obamacare punishes employment growth, and the incentive is to not grow.”

Just sayin'.

Supporters of government intrusion always like to talk about the winners and pretend there are no losers. Yes, raising the minumum wage makes it more expensive to hire workers, But, hey, that won't cause layoffs or make the cost of my hamburger go up. Come on, that's just silly, conservative fear-mongering.

Later on in the story, there is this:

Casey Mulligan, an economics professor at the University of Chicago, testified that the law’s income-based insurance subsidies for people not offered coverage by their employer is a disincentive for people to work and earn more than the maximum allowed for receiving a subsidy.

“Fundamentally, when you’re giving stuff to people when they don’t work and earn, you’re going to have a disincentive,” he said.

Mulligan estimated the law will reduce weekly employment and aggregate work hours by 3 percent.

Maloney asked him whether he would consider that to be the “economic ruin” that critics of the law predicted.

“I don’t think the word ‘ruin’ applies to that,” he replied.

Hey, it's not quite the diaster that was predicted. Heck of a recommendation. "Not an economic ruin" is not a synonym for "successful government program."


Sat, 06/06/2015 - 2:33pm

This is more bunk.  If you own a business that sells 5000 hamburgers per day and it takes 10 people to make those 5000 hamburgers, what those people are being paid is not relevant.  If you want to produce those 5000 hamburgers you will need 10 people period.

If the cost of those 10 people increases for whatever reason, the business owner now has three choices.

1)  Layoff.  This option of course means that now the business cannot meet demand and is conceding sales to competitors while losing revenue but is keeping costs the same.

2.)  Keep enough people to continue producing the 5000 hamburgers and increase the price to maintain your percieved profit margin while hoping the price increase don't effect sales.

3.) Absorb the increase as a cost of doing business and shrink your profit margin a bit.

Of course,  if the cost of employees increases due to government action, all your competitors face the same issue.  And what about the cost of hamburger increasing?  Maybe bun prices rise.  AEP jacks up the electric bill.  All these things an morre can increase the cost of doing business but no one complains about that. Only if the cost of people increase then hell hath no wrath like the cheated business owner.

One more point.  If you can layoff (say because of Obamacare) and still maintain business as usual why did you have too many employees to begin with?  If you now have to pay $1.00 more per hour than you did yesterday so you eliminate help, you must be a piss poor manager to begin with for not right sizing your business regardless of cost.