ObamaCare & minimum wages: A double whammy
President Obama has joined the cacophony of lawmakers clamoring to raise the federal minimum wage to $10.10 an hour. This, when ObamaCare already increases employers' cost for their employees.
Combined, the proposed minimum-wage hike and ObamaCare's provisions would deal a devastating blow to entry-level earners, effectively sawing away for many the first rung of the employment ladder.
Under ObamaCare, employers with at least 50 employees must offer qualifying health coverage to full-timers. By 2015, this provision is projected to add $2.24 per hour to the cost of providing single coverage to an employee, according to James Sherk and Patrick D. Tyrrell. The penalty for noncompliance is a fine of $2,000 per employee, paid from after-tax dollars, Messrs. Sherk and Tyrrell write for The Heritage Foundation.
Together with the aforementioned minimum-wage proposal, “employers that provide health insurance would have to pay at least $13.27 per hour for workers with the required single health coverage” by 2016, Sherk and Terrell report. If employers opt instead to pay the penalty, the cost would be at least $12.71 per hour for each full-time employee.
Businesses already operating within tight profit margins would be forced to cut jobs, roll back workers to part-time hours or both, thereby eliminating what typically are first-time employment opportunities.
The minimum-wage proposal and what's already contained in ObamaCare will do considerably more economic harm than any conceivable good.