Examiner Editorial: Obamacare would create more unemployment

The last thing struggling small businesses need now is yet another employer mandate from the government, but they’ll be getting a big one if Congress passes the so-called Affordable Health Choices Act, better known as Obamacare. And the last thing the economy needs is more unemployment, which this budget-busting, jobs-killing bill virtually assures.

The Congressional Budget Office initially estimated the cost of Obamacare at a staggering $1 trillion to insure 16 million of the 43.8 million Americans now without health insurance. According to the Heritage Foundation, Senate Health, Education, Labor and Pensions Committee staffers reworked the original unpalatable draft to get the price down to $597 billion to insure 20 million people by 2019. They did so by dramatically reducing subsidy levels, and also by adding a proposal requiring small companies with more than 25 employees to offer health coverage or pay a $750 penalty per employee.

Terry Neese, at the National Center for Policy Analysis, says small-business owners like her are worried that this provision, in addition to an Obama administration proposal to mandate sick leave for companies with 25 employees (the current threshold is 50 employees) will force them to lay off workers. “A lumberyard owner in Georgia who has 29 employees told me that he’ll have to let four people go,” Neese told The Examiner.

Small businesses have already been hit hard by the recession. According to the Bureau of Labor Statistics, 35 percent of net job losses during the first three quarters of 2008 were at firms with fewer than 20 employees, unlike conditions after 9/11 when small companies accounted for less than 1 percent of net job losses. Obamacare will hit small businesses hard when they’re already down.

In 1989, Larry Summers, now Obama’s director of the National Economic Council, wrote: “There is no sense in which benefits become ‘free’ just because the government mandates that employers offer them to workers ... so [they] are likely to create unemployment.”

Small businesses need family-friendly, flexible, portable and affordable health insurance for their employees. While Obamacare tantalizingly offers some small firms subsidized relief from rising health care costs in the short term, in the long term it will force up their taxes and add yet another burdensome government mandate that will wind up costing many employees their jobs.