CEPR Report Debunks Obamacare as "Jobs Killer"
Most employees work less by choice, study says.
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Fact or Fiction? - While critics have pegged President Obama's health care plan as a "job killer" due to its sanctions placed on employers who refuse to provide insurance to their workers, new analysis from the Center for Economic and Policy Research (CEPR) finds that relatively few employers are slashing their workforce to avoid penalties. Keep reading for key insights from the study and click here to read the full report. — Britt Middleton(Photo: Courtesy of CEPR)
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ACA Penalties - The Affordable Care Act (ACA) requires employers with 50 or more employees to provide a minimum level of health coverage to their full-time employees (the ACA defines "full-time" as workers working 30 hours or more per week). The penalty for not providing insurance is $2,000 per worker after the first 30 workers. (Photo: REUTERS/Tim Gaynor)
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Relatively Modest Impact - In its report, CEPR says that the financial impact would be "relatively modest" on most employers. For example, researchers write, "If the pay of full-time workers averaged just $10 an hour, this would be an increase in annual compensation of less than 10 percent." (Photo: Cavan Images / Getty Images)
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Minimum Wage - Examining income wage trends, researchers said they have found "no measureable employment impact" from sizeable increases in the minimum wage, which is why they say it is "unlikely" ACA would have a large negative impact on employment. (Photo: Victor J. Blue/Bloomberg via Getty Images)
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"Implausible" Harm - While some companies claim they are forced to cut down their workforce as a cost-saving measure after Obamacare was passed in 2010, CEPR researchers wrote that that claim, as well as blaming the heath care law for stagnant job growth between 2010-2012, was "implausible." (Photo: Mario Tama/Getty Images)
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Available Options - "Since employers generally have the option to dismiss workers at will (unless they have a union contract), there is no reason that they could not have added employees in the years prior to 2013 to meet their demand for labor and then reduce employment in 2013 to avoid the ACA penalties," according to the report. (Photo: Willie B. Thomas / Getty Images)
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Staying Below the Limit - While researchers say it is still too early to rank by size the employment firms staying below the 50 worker limit as of 2013, they say it is unlikely that "more than 1 percent of potential employment growth would be in employers that are near this cutoff." The report goes on to say that if employers are limiting or reducing their employment, "the impact would be too small to be noticed in the economy as a whole." (Photo: REUTERS/Rebecca Cook)
Photo By Photo: REUTERS/Rebecca Cook
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Possible Impact - However, researchers said that firms limiting employee hours below 30 hours a week may have an impact on employment patterns, noting that some large employers have said they would deliberately cut workers' hours below 30 per week to avoid penalty, as well as small businesses who say the same (although small businesses are not impacted by the law). (Photo: Ariel Skelley / Getty Images)
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A Worker's Choice - Researchers cite the Current Population Survey (CPS), which provides monthly data on workers, as a barometer for overall employment trends. Comparing the first four months of 2012 to 2013 of workers employed 26-29 hours a week, researchers noted that only a relatively small share of the workforce (0.6 percent or less than one million workers) fell into this group. The report added that more than two-thirds of the workers who reported working less than full-time jobs said that they are doing so by choice. (Photo: Inti St Clair / Getty Images)
Photo By Photo: Inti St Clair / Getty Images