The Biggest Economic Story of 2013...
Sorry, but it is not the fiscal cliff. It is the complete shift in the US labor model, at least in the service sector, due to Obamacare.
Here is what I am doing for the rest of the year -- working with every manager in my company so that as of January 1, 2013, none of our employees are working more than 28 hours a week. I think most readers know the reason -- we have got to get our company under 50 full time employees or else I am facing a bill from Obamacare in 2014 that will be several times larger than my annual profit. I love my workers. They make me a success. But most of my competitors are small businesses that are exempt from the Obamacare hammer. To compete, I must make sure my company is exempt as well. This means that our 400+ full time employees will have to be less than 50 in 2013, so that when the Feds look at me at the start of 2014, I am exempt. We will have more employees working fewer hours, with more training costs, but the Obamacare bill looks like about $800,000 a year for us, at least, and I am pretty sure the cost of more training will be less than that.
This will be unpopular but tolerable to most of my employees. The vast majority of them are retired and our company is merely an excuse to stay busy, work outdoors, and get a little extra money.
But this is going to be an ENORMOUS change in the rest of the service sector. I have talked to a lot of owners of restaurants and restaurant chains, and the 40-hour work week is a thing of the past in that business. One of my employees said that in Hawaii, it was all the hotel employees could talk about. Many chains are working on mutli-team systems where two teams of people working part-time replace the former group of full-time employees. 2013 is going to see a lot of people (who are not paid very well to begin with) getting their hours and pay cut by 25%. At the same time that they are required, likely for the first time since many are relatively young, to purchase health insurance.
It will be interesting to see what solutions emerge. My bet is that it will become standard for people in the service sector to work two different jobs for 20-25 hours each with two different companies. This will be a pain for them, but allow them to keep their income up. The hard part may be coordinating shifts between companies. For example, a company that divides their shifts into mon-tue-wed vs. thu-fri-sat cannot share employees with one who divides their shifts between morning and afternoon. If given time, I would guess that just as the mon-fri workweek emerged as a standard, companies may adopt standard ways of dividing up the work weeks for part-timers, making it easier for schedules to mesh.
when looking at that chart - it helps to look at the IRS income caps for the EITC:
http://www.irs.gov/Individuals/EITC-Income-Limits,-Maximum-Credit--Amounts-and-Tax-Law-Updates
The full time equivalents thing is really scary. Because it means that the law is well designed to make business owners pay... which means that it is well designed to put many business owners at the margin out of business. Forget the idea of more part time workers. It will be a simple case of many more people out of work.
Are you that naive? I know many people who work in construction. part of the year, they are unemployed. If you think for 1 second that they don't know the exact break mark on their benefits--the point where they no longer qualify for unemployment--you are crazy as a loon. They will work up to that magic number-and not an hour more. Similarly, folks who receive SS benefits--if i make an extra $, but lose $2, i don't earn the extra $.
I know some too but not many that are on social security.. it's pretty hard physical work.
SOME people MAY look at the numbers and act accordingly but it's mostly a losing proposition if you can earn more by working more and not get dinged that badly.
If you actually look at the EITC for instance, it's NOT a step-function - it's GRADUATED and at most people get 5K back. If someone is earning over the threshold - they're not going to cut their hours back so they can still qualify for the EITC. I think there is a disrespect of people involved in this perspective. Most people want a job, a good job, and they want to get promoted and earn more money. A few are slackards but to be honest I've seen just as many slugs who earn a bunch of money merely by being in the right place at the right time.
Larry, given your past idiotic performance and flagrant misconceptions (about pretty much everything), I'm pretty sure it's you who misunderstand the law.
I'll take the other side of your trades all day long...
I think people have discovered your defect, Larry.
It will be amusing watching you (possibly) discover it as well....
see the thing about you neanderthal types is that you almost revel in your ignorance and denial and wear it like a badge of courage....
it's one thing to be an principled opponent of something but you boys are just plain lame.
http://www.agweb.com/article/obamacare_compliance_starts_now/
Nice retort Larry.
Now explain why my health insurance just got worse, and we had to change plans?
Both were stipulations of Obama which would not happen.
health care costs and changes have been ongoing long before ObamaCare - and they continue. The county school in my area - who self-insure just got whacked with a multi-million dollar increase because of several people who have very expensive illnesses.
every person in that plan will have to pay more AND receive less coverage to make up for the loss.
ObamaCare had nothing to do with it. Are you sure it had something to do with yours?
Not an answer, Larry.
My family’s health insurance, via a Very Large Corporation, just got much, much worse, and much more expensive (2k – 3k/year), directly as a result of Obamascare.
Your messiah said that wouldn’t happen.
Explain.
Sorry, Very Big Corporation of America
http://www.anyclip.com/movies/the-meaning-of-life/the-very-big-corporation-of-america/
explain? no.. how about you explain? you can't make it so just by saying so guy.
Ipso facto is your specialty, fool.
Explain why my health insurance changed as a direct result of your stupidity/your messiah.
Meso - are you daft or just "in character"? just because your health care changed does not mean it was caused by OC. Lots of insurance changes every year because of increased health care costs.
My healthcare plan changed because the Obamascare Cadillac tax would have added multiple double-digit millions of dollars to carry.
Explain again why my healthcare plan didn't change as a direct result of Obamascare.
so you were receiving a tax-free Cadillac Plan?
You are dumber than we thought.
Larry, lots of things sound really good on paper, and are nice intentions.
Most of them turn out to be horrible ideas upon implementation, like, say, socialism, or collectivized statist central planning, meant to “guarantee equality” (of outcome).
Those plans always fail.
Obamascare is yet another example. The most invasive one.
Not only will it fail, it will likely incite violence, from all those fired because of it, and it will increase – not diminish – the gap between those it is designed to shrink.
Well done, sir, well fucking done.
Larry, some very bad economic things (and likely other resulting consequences) are about to happen to this country.
I hope you understand exactly what you just did last election.
I’m 99% certain you have no clue.
Geeze Meso... I dunno what to say.... I woulda voted for Romney if he had a real budget plan and disowned the racists and other neanderthals in the party but alas the man had no clue about either so I had to hold my nose.... and you know the rest....
But I'm not convinced that Mr. RomneyCare would not have had an encore anyhow after he repealed the "hated" ObamaCare.
It was clear that the right thought they would control Romney and that explains why they discarded him like a used tissue after he lost.
so you boys are gonna have to regroup... a bit.. it looks like.. or ...with a little luck ya'll will
lurch even further to the right and piss off the minorities even more.
one can only hope. :-)
Larry, you never know what to say, because you're a fucking abjectly idiotic, stultifying bizarre moron.
Again, explain why my heathcare changed, when you said it wouldn't, moron.
Perhaps legal liability could be assigned to Obamascare voters.
Theoretically speaking, Mayor Pelosi.
Yet we had coke v. pepsi in the election?
Warren, you are absolutely correct about the disruption/destruction of skilled labor and institutional memory when part-time work becomes the norm next year.
When I go to the bank, I cannot help but think that the only full time employee there will be the computer.
The fufilling career job where the worker learned and developed skills and earned more because they became more productive is out the window.
Larry, you have still failed to explain why my healthcare just changed, due to you.
I promise* not to sue you directly if you can fabricate any semi-cogent reason therefor.
*Promise not guaranteed In IL, MA,TX, AZ, and other states.
Mesa - I have no idea why your health care went up but I know that for the last 10 years, health care for a lot of people has gone up - way before we ever heard of ObamaCare.
So what happened to your health care costs prior to ObamaCare? Did you go 10 years with no increases or changes? I bet not.
You guys kill me. You live in a self-constructed world of self-denial about simple realities just so you can hump about things you don't like. There is a good reason why you're referred to as angry white guys.... You lost the election because of your self denial... and anger.
Yeah, I know that's what you say. And no matter how many times and how many ways it is explained to you, nobody has been able to dumb it down enough for you to understand it. That's what makes you so hilarious. And also what makes everyone regret trying to make you less stupid. Some problems you just can't fix.
Say whuuut? Didn't Dear Leader promise to not only part the sea but also bend the health care cost curve and expand coverage with the magical Obamacare? So, remind me why, having swallowed that horseshit, we shouldn't be surprised that the costs are rising faster and coverage is getting worse?
Ok, ok, ok, Larry, my apologies – I wasn’t playing fair. My bad.
You can’t explain why my healthcare changed as a direct result of your messiah because he lied, and you were stupid enough to believe him.
Now that we’ve established 1) you’re a moron, and 2) you believe morons, where do we go from here?
I have several ideas, a few involving violence, at your expense.
but what you 'explain' Methinks is horseshit... itself.... you're all theory and no practice done most inelegantly with a foul mouth.
Yeah, I know, Lar. Anything you're too dumb to understand is "horseshit".
If an employer provides insurance he may benefit by virtue of an employee having Medicare in that the employer covers over the top of Medicare. But for an employer that doesn't provide insurance to employees (which was my point) he'll pay a penalty regardless of how the employee complies with his mandate to have it.
Your expectations are way too high.
or you offer a health plan that pays really low, i.e. medicaid reimbursements, and covers 60% of services and the cost of the plan should be less then $2,000 per year.
$2000 penalty if you don't offer essential and affordable insurance. If you offer essential but not affordable you pay a $3000 fine but only for those that go to the exchange and get a subsidy. If you offer a really cheap minimal plan your over 65 population would most likely waive and take Medicare. Since they would not be going to the exchange their would be no penalty.
I thought a number of his employees were seasonal, there is also an exemption for those. You could hire two teams of seasonal workers and avoid FT classification.
There is a good chance ObamaCare did, if not for ObamaCare they could have had or implemented an annual cap that would prevent hospitals from running up excessive charges. The move to no annual or lifetime limits gave hospitals carte blanch license to treat private insurance like a money tree, take what you need. ObamaCare also limited employers ability to decrease benefits or increase cost sharing under threat of new mandates for losing grandfathered status. ObamCare also mandated coverage for experimental treatments that can cost millions with no positive outcomes.
Aggressive stupidity is noting to be proud of, son.
"noting" ?
Then the appropriate response is to bring anti-structuring laws into labor relations. Then crack down hard on businesses that try to evade the law while rewarding those that comply in spirit and letter with deep tax cuts.
Hire under 50 employees to avoid the PPACA laws? Then the answer is to assume noncompliance.
Have them work 25-28 hours? Same thing and to presume that the employer is testing the bounds.
Opted to add middlemen by making them contractors? Then multiply costs for hiring second-class citizens such as temporary/PT/contract workers versus directly hired FT workers. Then require that the cost cannot be passed down nor can any other party bear the penalty.
Try to make some inter-employer arrangement? Treat the group as a single unit no matter how disassociated.
The answer is not to reward businesses for being clever against workers, but to cause too much pain to not do the proper thing - hire them directly as full-time & benefit workers.
Excellent grammar and spelling enforcement, Larry.
Please explain to the room why my healthcare changed and got more expensive, after Obama (and you) guaranteed it wouldn't.
I eagerly await your response.
Larry, you seem like a gambler.
You like cards, Larry?
Wow, Larry, 1 whole day elapsed here, and you couldn't even answer your own moronic question.
You would likely get it wrong.
PS, "By whoM" Larry
So Larry, do you like movies about gladiators?
I'm also having second thoughts about not suing you.
The IRS would have a wonderful field day with you, courtesy of one of your former employees. You are part of the problem.
And the neat thing is that you(or any other employer) wouldn't know who and couldn't retailate against the person if you did.
How about just putting in things that make temporary employment and structured avoidance in employment law (such as advocated in this post) a financial non-starter? Take away the things that businesses use to avoid the spirit of the law while rewarding those who follow both spirit and letter.
The real world is beyond your grasp, Larry. Shortages resulting from
keeping prices from rising when demand is higher or supply is lower is
an indication that the laws of supply and demand are working as one
would expect. A higher price would signal demanders to demand less
and suppliers to supply more until equilibrium is reached. Get a clue, Larry.
Actually Ron - the real world does not always work accord to economic theory and that's what the reality is. It "helps" to understand that - to recognize it when dealing with real things.
supply and demand theory underlie markets no question but we have this entity called govt that perverts and distorts the markets also and my view is that a pragmatic acceptance of reality is preferred to ideological rigidity. You can rail against it but it would be like accusing an electrician of putting in a transformer to mess up the law of electricity.
"Actually Ron - the real world does not always work accord to economic
theory and that's what the reality is. It "helps" to understand that -
to recognize it when dealing with real things."
ZING!!