Tonawanda News

Columns

July 17, 2013

Competition under the employer mandate

(Continued)

Tonawanda News — But, now, after using health insurance as a competitive tool for more than 70 years, market sectors and employers that had rewarded talent — and found it and kept it— will no longer be able to do so with those methods. Under the employer mandate, those once-differentiated employers will be no different than anyone else. Most every business of any size will be doing what they once did. When this portion of Obamacare goes into play (2015), business with 50 or more full-time employees will, by law, have to pay for their health insurance and the cost passed on to their workers cannot exceed 9.5 percent of the employee’s total household income.

So, with the uniqueness of insurance no longer at their disposal, what will those employers do to remain competitive in the labor market? That’s a very difficult question to answer. There are hundreds of thousands of companies across the nation looking for an answer, any answer.

Cheerleaders for Obamacare will likely respond that it will cause those employers to increase wages. But will it? The answer is no, because those employers already have defined cost structures and, more than likely, are selling their products at the best possible price. They can’t increase their selling prices to accommodate new or increased labor costs and benefits just because other employers (in entirely different industries) had to increase their costs. If they do that, they won’t be very competitive selling their wares in the global marketplace. Then, no one will have access to private health insurance because no one will have a job.

Gasport resident Bob Confer also writes for the New American magazine at TheNewAmerican.com. Follow him on Twitter @bobconfer.

Gasport resident Bob Confer also writes for the New American magazine at TheNewAmerican.com. Follow him on Twitter @bobconfer

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