They can force us to pay for health care, and fine us if we don’t, but they can’t prevent us from firing workers or lowering wages

Fri, Oct 30, 2009

Health Care, Job Creation

We’ve been having a lot of conversations with Small Business owners about how they will change their businesses if Congress passes their monstrous, prosperity-killing Health Care Bill.

We are also small business owners and employees ourselves, and what is emerging from these conversations frightens us and should frighten all American workers.

The consensus? “They can force us to pay for health care, and fine us if we don’t, but they can’t prevent us from firing workers or lowering wages.”

When you change incentives, you change behaviors, and if this bill passes, Small Businesses are incentivized to lay off workers and lower wages.

As the health care bill in the house currently stands, employers will be forced to provide health insurance to all workers.  Since health insurance is a compensation cost, employers are reviewing which employees are most important to them, or give them the most hours, and are making plans to fire employees who do not give them enough value to justify providing insurance.

If small businesses choose to not provide health insurance, they’re going to be levied an 8% of payroll fine.  Since that just means total compensation costs go up by 8%, businesses will offset that by lowering wages (or firing people).

In fact, some businesses we’ve talked to are getting ready to lay off workers and then hire new people who have been laid off elsewhere, but paying a lower wage than they did for the same work before – but, hey, the employee will have mandated health insurance (even if her standard of living drops in every other area)!

In an era of 10% unemployment, massive deficits, an enormous national  debt burden, and growing unfunded liabilities for Social Security and Medicare/Medicaid, the government is about to do something that will kill wage growth and increase unemployment.

Oh, and it will mean less doctors who want to practice medicine, punishment of all companies that innovate in the medical industry, all while increase demand for medical services.  Rationing, here we come.

We were right about Cash for Clunkers.   And we’re right about this.

Our only hope is that someone in Washington wakes up.  And soon.  Because we’re at the precipice.

If you haven’t made a call to your representative recently, now would be a good time to make a last minute push.

Please email this to your friends, family members, and co-workers who work for small businesses, and let them know about this imminent danger.

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- who has written 71 posts on Small Business Against Big Government.

12 Responses to “They can force us to pay for health care, and fine us if we don’t, but they can’t prevent us from firing workers or lowering wages”

  1. Richard Foster Says:

    There is no question that many small businesses are going to lay off workers. If, for no other reason, the added 8% employment costs will exceed the profit margins for many small businesses. At the same time, however, with less employees, more small businesses will simply not be able to do the work that is needed to be done and will go out of business through the inability to provide the services.

    To compensate for this situation, every socialist country in the 20th century saw the creation and rise of the “underground” economy. This means that employees become willing to work for payment “under the table” with no taxes, unreported barter services rise with a loss of commerce and organized crime escalates as law is ignored! At the same time, tax revenues will plummet and additional taxes will be added to compensate for the growth of government programs. In short, the economic system will break down and government enforcement agencies will begin to terrorize the general public.

    If this sounds like the baseless ranting of a disgruntled small business owner, read “Atlas Shrugged” one more time and then recognize that the only difference between prosperity and oppression is government controlled compassion!

  2. Sid Frasier Says:

    The fact that the number of uninsured individuals is so high is because many of them choose to be. We offered our employees the option of health care or to take the amount as additional pay. I was shocked that 75% choose to take the money and not the coverage.

    There is no question the health care industry is mismanaged and overpriced. The solution isn’t federal government… as they can manage anything effeciently. Many are serving in government positions because they couldn’t get a job in the real world.

    Insurance companies are having to carry the burden of medical industry fraud and overpricing. It is a fact that Hospitals and Doctors charge more when patients have insurance. High premiums are also the result of trial lawyers that pray on “victims” of actual and perceived incompetence throughout the health industry. Ethics and core values have eroded. The biggest sickness in much of our society is greed and fraud, so that cancer must be healed if this country is to continue as the leader of the free world.

    Health Insurance is a personal responsibility not a God given right. The cost of coverage should be tax deductable, set aside by individuals in an interest earning saving plans, and under the control of the person getting the health care products or services. People that abuse the system should lose the entitlement.

    Individuals that cannot afford to participate must show justification to receive assistance… the lasy and stupid do not qualify!

    • admin Says:

      Great thoughts. The “Healthcare is a Right” canard is one of the more sad developments in this debate. As Ron Paul – a Doctor – said, (paraphrasing), “Last I checked health care was a service I provided to people.”

      Rights imply uniform obligations. If health care is a “right”, then everyone has an equal obligation to provide it to others, meaning that you have no right to receive it unless you are giving it. And that would mean, goodbye welfare state . . .

      But of course leftists don’t mean it’s a “right”! When they use the word “right,” they don’t ever intend “uniform obligations.” No, they intend, asymmetrical, unilateral obligations wherein one group is enslaved to provide for whichever group they have deemed deserving.

      There is no such thing as leftist logic. Nozick destroyed Rawlsian illogic in the 70s, but the leftists just bury their heads in the sand and pretend that the Soviet State only failed because *they* were not in charge of it.

    • greg davis Says:

      it is not true that hospitals and doctors charge more when a patient is insured. in fact, just the opposite. if you have been to the doctor without insurance you would know that you are charged more than the “negotiated rate” that would be paid by the insurance co.

      • Bryan Says:

        Ahh but they code for several extra things that they would not normally charge a cash paying person thereby incrementally driving the overall cost up. This is because they typically only get between 30-40% of what they bill in return. Finally, they subsidize the below market standard pay that they recieve for treating medicaid and medicare patients by charging th private insurers a greater amount.

  3. Daniel Sweet Says:

    This is another of MANY reasons why I totally eliminated employees from my business 2 years ago. Now I outsource to IC’s (independent contractors) or other businesses. I am now free from the strangle hold government has over small business. I encourage ALL businesses to consider the same approach. Keep in mind that letting your employees go does not make them jobless. They can always start their own business like we did and never be unemployed again. It’s their choice to be a victim or a VICTOR. Then you can outsource to them and you both still enjoy a good working relationship. It’s win-win for us and locks out Big Brother.

    • admin Says:

      This is a great solution for some kinds of businesses, but many others utilize labor in a way that prevents them from employing people who can work in a way that qualifies them as ICs.

      But all who can do this, will (and should) do this.

      The unintended consequences of PelosiCare will be ugly, but the market will adapt (albeit while introducing huge regulatory inefficiencies) and the people who will be hurt most will be the ones PelosiCare promised to help.

      Just as the welfare state has irreparably harmed the poor, the health care takeover will irreparably harm the sick and will result in more illness and less effective treatment!

      Write it in stone. It’s economic law.

  4. Barry Jacobs, M. D. Says:

    Be worried, if not afraid. As it is, seniors have a problem finding physicians who will see Medicare patients. Medicaid is even worse. Between inadequate compensation to pay expenses to care for those patients, and the oppressive paper work and regulations, who wants to deal with it? Now consider if everyone is on the same kind of plan. Will there be any physicians left in practice, or will we find other ways to actually earn a living? Now what will the public do?

    • admin Says:

      You’re getting to the heart of the matter. I’ve been having discussions with other doctors – in recent days had in depth discussions with an emergency room nurse and a pediatrician – and both are very concerned that the supply of doctors will be be dropping in the coming years as the incentive to become a doctor will drop. In short, it will just be a pain in the neck, the government will stand between you and your patient dictating what you will or won’t do for her …. when it’s more lucrative to become a “confiscatory government bureaucrat” than a life-consuming healer, why would anyone opt-in to permanent victimhood?

  5. admin Says:

    emergency room nurse = emergency room doctor . . . wasn’t a nurse I spoke with, it was an ER doctor.

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