businessweek gets its facts wrong

Saturday, March 27th, 2010

business week quotes goldman sachs as saying that the new healthcare law that was passed in the united states will lead to job creation. which from a logical standpoint is wrong.

the u.s. government has just passed a new law that is 2400 pages long requiring business with 50 or more employees to offer their workers health insurance. those with less and who don’t pay any one worker over $50K per year, will be exempt.

well, from a financial perspective, this is all the more reason to layoff a bunch of workers and ask employees to accept a paycut. if you ran a business with 51 or 52 or even 60 employees, what would you do?

yesterday, the l.a. times reported that although many elements in the economy look good in california -retail sales are up, etc., employers are reluctant to expand their payrolls. so unemployment in california is still 12.5%. and considering the u.s. government doesn’t count the unemployed too honestly. this is just the people who are still collecting unemployment insurance and are in the system. it doesn’t include the people whose unemployment insurance has run out or the people who are working part-time (or multiple jobs).

according to the u.s. chamber of commerce, ‘A mandate that employers provide health insurance or pay a fee will devastate many small businesses that operate at a loss or with low profit margins. These businesses will have to lay off workers and lower head counts.Although small businesses have been exempted if they have fewer than 50 employees, this constitutes a disincentive to grow and hire more workers. In addition, the bill unfairly penalizes businesses in the construction industry by lowering the threshold to which the mandate applies.’

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s