Shock: Low-wage workers may find they can’t afford coverage under ObamaCare

The Associated Press reports this morning that a “wrinkle” in the soon-to-be-fully implemented ObamaCare law may make employer-based health care coverage for low-wage workers unaffordable:

t’s called the Affordable Care Act, but President Obama’s health care law may turn out to be unaffordable for many low-wage workers, including employees at big chain restaurants, retail stores and hotels.

That might seem strange since the law requires medium-sized and large employers to offer “affordable” coverage or face fines.

But what’s reasonable? Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers.  For the employee, it’s like a mirage — attractive but out of reach.

The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance.

Many are expected to remain uninsured, possibly risking fines. That’s due to another provision: the law says workers with an offer of “affordable” workplace coverage aren’t entitled to new tax credits for private insurance, which could be a better deal for those on the lower rungs of the middle class.

[…]

The law is complicated, but essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee’s income. Failure to do so means fines for the employer. (Full-time work is defined as 30 or more hours a week, on average.)

But do the math from the worker’s side: For an employee making $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995 and the insurance would still be considered affordable.

Even a premium of $1,000 — close to the current average for employee-only coverage — could be unaffordable for someone stretching earnings in the low $20,000’s.

Keep in mind here that many would assume that employers would deliberately offer expensive coverage options in order to meet their obligations under the Unaffordable Healthcare Act, but in reality most wouldn’t – they know offering affordable coverage to workers is a benefit that would keep them competitive in the work marketplace,  helping bring  in new employees while keeping existing ones happy.  Also note that some employers may not have any option other than to offer expensive health insurance plans with the more “economical plans” being affordable but with high deductibles to meet, simply due to the rising cost of health insurance in general.    I’ve talked to many people offline and online who have already seen their health insurance costs rise and deductibles go up as a result of employers preparing for ObamaCare.  For example, pre-ObamaCare, yours truly was on what some would call a “luxury” plan – single coverage paying around $40 a month, including prescriptions and dental.  No deductible for health or dental or prescription. Since ObamaCare, I’m paying the same amount per month but now have  a  high deductible to meet for health and a small one to meet for prescriptions … because that’s what I could afford.   Had I stayed on that “luxury” plan, I’d have been shelling out close to $300 a month. No can do.

Too bad we don’t work for Congress where at least one Democrat Congressman is calling for an “amicus brief” to be filed on behalf of federal workers because their rise in premiums are “unfair”,  or are friends of Obama, where we could be in line for an waiver, however temporary….

Just say NO.

#Solidarity.
(Photo via Breitbart.com)

Dem Governors to Gov. Perry: TX needs to stop trying to steal our jobs!

If this story doesn’t make you laugh out loud with glee while doing a little “Toldjah So!” chant, I don’ t know what will:

Gov. Rick Perry’s high-profile efforts to lure jobs to Texas from other states may be good business and smart politics back home, but they’re infuriating to prominent Democrats around the country.

And now at least one Republican business leader says Perry’s taking the Lone Star swagger a little too far.

Perry’s forceful recruitment campaigns, featuring radio and magazine ads as well as personal appearances, promise low-tax, pro-growth policies in Texas —and they also trash the business climate in places like California (“…I hear building a business in California is next to impossible”) and Illinois (“…an environment that, intentionally or not, is designed for you to fail.”)

Those attacks hit where it hurts and have touched off an angry political backlash against Perry outside the Texas borders, with Democrats mocking his attempts to steal jobs as clownish – and warning the Republican governor to keep his hands off. In a memorable put-down, Gov. Jerry Brown said Perry’s incursions into California were about as effective as breaking wind.

But other observers say Perry knows exactly what he’s doing.

“At the end of the day, no matter how any of the [states] respond, people are left with two distinct messages: That guy down in Texas has got big brass balls and he’s creating a lot of jobs,” Mark McKinnon, a political strategist with deep Texas ties, told POLITICO. “It’s brilliant marketing and very smart politics.”

McKinnon also noted, “Of course it breaks all the rules of inter-state diplomacy and protocol.”

Perry has stepped up jobs raids into the blue states of Illinois and California this yearefforts that come as he looks to announce his next political step after the Texas legislative session concludes. His current gubernatorial term is up in 2014, and he hasn’t ruled out a 2016 presidential run.

Heh. Read the rest of the article to find the names of the Democrat feathers he’s ruffling,  and which Democrats are putting on airs about how Perry ‘can try, but he won’t succeed.’  Hilarious because … many CA companies are indeed finding Texas to have a much more hospitable business climate.  Some California companies have ALREADY moved to TX – with many more considering. Get used to it, Dem. Governors. And while you’re at it -why not make your respective state’s business policies as friendly as Texas’ are so that these companies won’t want to relocate?  This is the spirit of good ol’ American competition. Hello?

TX Gov. Rick Perry

Nice work, Gov.

To deal with #Obamacare, school district cuts employee hours

**Posted by Phineas

“But at least we won the election! Obama!!”

“But at least we won the election! Obama!!”

A little Blue on Blue action for your Friday, as one liberal constituency, school district employees, feels the pain to satisfy the demands of another, the “free healthcare and unicorns for everyone” crowd.

Elections. They have consequences:

1 [sic] of Indiana’s largest school districts is cutting the hours of 610 part-time teaching aides and cafeteria workers to save money and to avoid providing them health insurance under the federal health care overhaul.

Fort Wayne Community Schools Chief Financial Officer Kathy Friend says it’s cutting their hours from 30 to 25 each week beginning June 3 because insurance would have cost $10 million. Beginning in January, large employers must offer health insurance to those who work at least 30 hours per week.

Friend told The Journal Gazette for a story Monday the insurance matter is “something that almost all employers with part-time employees are trying to resolve.”

And I don’t blame the school district one bit. They have a certain amount of dollars to work with each year, but their costs are going to go up tremendously in 2014 if they don’t make changes. Labor is another cost, so there’s a logical place to make cuts. Sadly, it looks like those targeted are also those who already make the least.

Once again, the progressive failure to understand basic economics and human nature winds up hurting those they claim they want to help.

via Conservative Intelligence Briefing

(Crossposted at Public Secrets)

The Obamacare Chronicles: 129 laid off from Missouri hospital due to wonderful new health bill

**Posted by Phineas

“But at least we won the election! Obama!!”

“But at least we won the election! Obama!!”

At this point, there’s not much we can do about it, folks. Losing a Supreme Court decision and the 2012 election guarantees that Obamacare will go into full effect on January 1st, 2014 — Happy New Year!

All we can do for now is observe and take note of the pain (some of it our own) as businesses make their plans to deal with the forthcoming train wreck, plans that include laying people off to cover the new, federally-imposed expenses:

From Channel 41 Action News (1), Kansas City, Missouri:

I’ve reported on the consequences of Obamacare before, and we’re going to see more and more as we approach 2014 and enter our Brave New World of government-controlled health care. The PPACA imposes immense burdens on businesses, and they will have to act rationally in response, whether by passing on costs to the consumer or cutting costs elsewhere — by layoffs, for instance.

People who voted for the Democrats since 2008 are, in effect, getting exactly what they voted for, even if they refused to see it at the time.  (2) To use the cliche, “elections have consequences.”

But so do bad laws, and the people can always fix their mistakes in the next election. Obamacare is the “Mother of Bad Laws,” and I predict its myriad problems are going to cost the Democrats dearly as voters harmed by Obamacare first get worried, then annoyed, then angry, and then royally ticked off. Democrats are already so worried that some are retiring to avoid facing the voters in 2014.

Elections have consequences for the ruling class, too.

via Jim Geraghty’s Morning Jolt

Footnotes:
(1) For any Obamacare apologists in the audience, before your knee jerks too much, note that Channel 41 is an NBC affiliate, not the evil FOX. When you’ve lost NBC…
(2) No, I’m not saying the people laid off in Missouri all voted for Obama and thus got what they deserved. Some almost certainly did, but we don’t know who or how many. Presuming innocence, they all have my sympathy.  But the broad electorate voted for people who used anti-constitutional means to pass a horrendous law in expectation of getting Free Stuff(tm), in violation of all the laws of economics. To them, I can only quote the words of the late, great Mayor Ed Koch: “The People have spoken … and they must be punished.”

(Crossposted at Public Secrets)

The April jobs report and the part-time recovery

**Posted by Phineas

“But at least we won the election! Obama!!”

“But at least we won the election! Obama!!”

The Bureau of Labor Statistics released it’s report for April today, showing numbers that should at least be slightly good news for the administration: unemployment down to 7.5% and 165,000 jobs added. Recovery!!

AEI’s James Pethokoukis says “not so fast:”

US job growth in April beat economist expectations as nonfarm payrolls rose 165,000, and the jobless rate fell to a four-year low of 7.5%. But the report contained worrisome signs that President Obama’s health care reform law is hurting full-time, high-wage employment.

While the American economy added 293,000 jobs last month, according to the separate household survey, the number of persons employed part time for economic reasons — “involuntary part-time workers” as the Labor Department calls them – increased by almost as much, by 278,000 to 7.9 million. These folks were working part time because a) their hours had been cut back or b) they were unable to find a full-time job. At the same time, the U-6 unemployment rate — a broader measure of joblessness that includes discouraged workers and part-timers who want a full-time gig – rose from 13.8% to 13.9%.

What’s more, there wasa  0.2 hour decline in the length of the average workweek. This led to 0.4 percentage point drop in the index of average weekly hours, “equaling the largest declines since the recovery began,” notes economist Dean Baker of Center for Economic and Policy Research.

Let’s see, more part timers and fewer hours worked. Economist Douglas Holtz-Eakin says what we’re all thinking: “This is not good news as it reflects the reliance on part-time work. … the decline in hours and rise of part-time work is troubling in light of anecdotal reports of the impact of the Affordable Care Act.”

Jim adds that, if the Labor Force Participation Rate were the same now as it was when Obama took office, then BLS would be reporting unemployment of between nine and ten percent. (And see this for a graphic chart of how the LFPR has gone down under Obama)

It’s not that unemployment is going down, it’s that the number of people who’ve given up looking for a job is growing, and an increasing number of those who have a job are limited to part-time work, thanks to Obamacare.

Such is the nature of the Obama “recovery,” the worst since the Great Depression.

(Crossposted at Public Secrets)

New maker of Twinkies: Non-union workers will be used to restart plants

Let the OUTRAGE!!!!!!! begin:

The company that bought the Twinkie, HoHo and Ding Dong brands out of bankruptcy is gearing up to reopen plants and hire workers, but it won’t be using union labor.

Hostess Brands LLC—Metropoulos & Co. and Apollo Global Management LLC’s APO -2.11% new incarnation of the baking company that liquidated in Chapter 11—is reopening four bakeries in the next eight to 10 weeks, aiming to get Twinkie-deprived consumers the classic snack cake by mid-July.

Chief Executive C. Dean Metropoulos said the company will pump $60 million in capital investments into the plants between now and September and aims to hire at least 1,500 workers. But they won’t be represented by unions, including the one whose nationwide strike sparked the 86-year-old company’s decision to shut down in November.

“We do not expect to be involved in the union going forward,” Mr. Metropoulos said in an interview Wednesday.

Hostess Brands Inc., the company that filed for bankruptcy protection in January 2012 and eventually sold off its brands and plants to several buyers, was once powered by 19,000 workers, 15,000 of whom were represented by unions. The company’s largest union, the Teamsters, had agreed to a new labor contract following a contentious bankruptcy trial. But the second-largest union, the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union, launched a work stoppage after the company imposed new labor terms on the union’s members. Hostess said the strike crippled its operations, forcing it to shut down.

A Teamsters spokeswoman declined to comment. A spokeswoman for the bakers union couldn’t be reached for comment Wednesday.

[…]

[…] Mr. Metropoulos and his son, Daren, the co-CEO of Pabst Brewing Co. who is also heading up the reborn Hostess’s marketing strategy, expressed confidence they would be able to find skilled, nonunion workers near the four plants, which are in areas with high unemployment.

“We’re trying to find the most qualified people in these local markets to come work for the company,” Daren Metropoulos said.

The new Hostess is firing up plants in Columbus, Ga.; Emporia, Kan.; Schiller Park, Ill.; and Indianapolis, Ind. It’s also considering whether to reopen a fifth plant it purchased, in Los Angeles. Previously, the Hostess products that Metropoulos and Apollo bought were made at 11 plants, but the elder Mr. Metropoulos said those plants were running at less than 50% capacity under the old model. The new Hostess plants will run at 85% to 90% capacity, making the business “as efficient as possible,” he said. The new company expects total capacity to be back to where it was before Hostess’s shutdown by September.

This is great news for #TeamTwinkie fans. I wish the company and its future 1,500 new non-union employees all the luck and success in the world. Can’t wait to see those Twinkie cakes back on the shelves in mid-July!

Twinkies

They’re baaaaaaaack …. ; )

AP: Economy “recovering”, but unemployed giving up on the job market in droves

The whole article paints a distinctly dismal picture of what the job market looks like right now, but the Associated Press still manages to twist the state of unemployment affairs and the jobs situation as a “recovery”, an “improving economy” (bolded emphasis added by me):

WASHINGTON –  After a full year of fruitless job hunting, Natasha Baebler just gave up.

She’d already abandoned hope of getting work in her field, working with the disabled. But she couldn’t land anything else, either — not even a job interview at a telephone call center.

Until she feels confident enough to send out resumes again, she’ll get by on food stamps and disability checks from Social Security and live with her parents in St. Louis.

“I’m not proud of it,” says Baebler, who is in her mid-30s and is blind. “The only way I’m able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on.”

Baebler’s frustrating experience has become all too common nearly four years after the Great Recession ended: Many Americans are still so discouraged that they’ve given up on the job market.

Older Americans have retired early. Younger ones have enrolled in school. Others have suspended their job hunt until the employment landscape brightens. Some, like Baebler, are collecting disability checks.

It isn’t supposed to be this way. After a recession, an improving economy is supposed to bring people back into the job market.

Instead, the number of Americans in the labor force — those who have a job or are looking for one — fell by nearly half a million people from February to March, the government said Friday. And the percentage of working-age adults in the labor force — what’s called the participation rate — fell to 63.3 percent last month. It’s the lowest such figure since May 1979.

The falling participation rate tarnished the only apparent good news in the jobs report the Labor Department released Friday: The unemployment rate dropped to a four-year low of 7.6 percent in March from 7.7 in February.

People without a job who stop looking for one are no longer counted as unemployed. That’s why the U.S. unemployment rate dropped in March despite weak hiring. If the 496,000 who left the labor force last month had still been looking for jobs, the unemployment rate would have risen to 7.9 percent in March.

Unfortunately, there are many more like Baebler who have been searching longer, whose unemployment ran out from not being able to find anything they can make a decent living off of.  And many who have found something in the meantime have found that their wages have decreased sharply from the last time they worked, because skilled workers and unskilled workers alike are so desperate for work in some cases they’ll take anything – sometimes two and three jobs – in order to try and make ends meet.  Others can’t afford to take those low-paying jobs for various reasons, and it’s just getting worse.

How AP can spin this economy as “improving”, and the fact that the percentage of unemployment went down .1 percent in an article that talks about how so many have dropped out of the job market is beyond me, but then again, we are talking about a news outlet who, along with many others the last several years of the Obama administration, have consistently reported on bad monthly economic news as “unexpected”, so I guess I shouldn’t be too surprised.

In any event, not to be a Debbie Downer on this beautiful Sunday, but there you go.  In spite of what the mainstream media – and this administration and all the liars in it – want you to believe otherwise, we are really in a wreckovery – not a “recovery” – and with the full impact of the mammoth legislation of ObamaCare starting to take effect nationwide, expect more of the same in the months to come as employers continue to desperately try to make profits and keep people employed while wrestling with the realities of what their bottom line can and cannot handle financially as a result of this administration’s extreme anti-business bias.

It is what it is – I hope I end up being wrong about what I believe the future holds for the job market, job seekers, and employers, but I fear I am not.  Time will tell.

Quote of the Day: Doing business in Texas vs. California edition

**Posted by Phineas

An observation on why Texas might have more appeal to business owners, from John Harrington, owner of Shield Tactical, who recently relocated his company from Orange County, California, to Austin:

In Texas, he said, “it’s an iota of bureaucracy.” In California, “it’s like before you put up your range you have to be worried about whether the noise level is going to bother the 10-headed duckmouse.”

That made me laugh, but it’s also so very true. One company found the regulatory environment here so burdensome, it wrote California a “Dear John” letter.

Oh, and if you think “duckmouse” was a joke, consider that Sacramento would rather let Central Valley farms die of thirst than fight the EPA over a two-inch bait fish.

BTW, the first linked article is a good one on how Texas is working to encourage firearms manufacturers to move to Texas from states that are imposing more and more restrictions. Smart man, that Governor Perry.

via Moe Lane and Rick Wilson

(Crossposted at Public Secrets)

Bad news for Dems: On the economy, Obama’s advantage over GOP is gone

So reports Micah Cohen at the NYT’s 538 blog (hat tip):

During the debate over the so-called fiscal cliff in December, public opinion surveys showed more Americans trusted President Obama than trusted Republicans in Congress when it came to handling the nation’s economy. The New Year’s Day deal to avoid going over the cliff, which included higher marginal tax rates on high earners — something Mr. Obama had campaigned on and lobbied for — was largely seen as a victory for the president.

But with more budget battles approaching, over raising the nation’s borrowing limit and perhaps reaching a grand bargain, Mr. Obama’s advantage over Congressional Republicans has all but vanished. Public approval of his handling of the economy has slipped, according to polls, and surveys now show that a roughly equal number of Americans favor Mr. Obama as favor Congressional Republicans on economic matters.

In December 2012 and January 2013, polls found that roughly half of Americans had more faith in Mr. Obama’s economic stewardship, while just over a third of respondents said they had more faith in the economic stewardship of Congressional Republicans. Since December, however, Mr. Obama’s standing has declined by roughly 10 percentage points, while Republicans in Congress have gained 4 or 5 percentage points.

Other pollsters, asking slightly different questions, have also found that the White House and Congressional Republicans are now on more equal fiscal footing. A Fox News poll conducted this week found when “it comes to handling the budget deficit,” 44 percent of registered voters agreed more with Mr. Obama, while 41 percent agreed more with Republicans.

CNN poll conducted March 15 to 17 found that respondents were split in whom they preferred on handling of “the federal budget and the way the government raises and spends money,” 47 percent for Mr. Obama and 46 percent for Republicans.

The CNN poll had another worrying number for Mr. Obama. The last time a government shutdown was in the news, in September 2011, CNN found that 47 percent of respondents thought Republicans in Congress would be more responsible for a shutdown if it occurred. Just one-third of respondents said Mr. Obama would be to blame.

But CNN asked the question again in its mid-March survey and found that Mr. Obama’s advantage was gone; 40 percent of respondents said they would blame Congressional Republicans for a government shutdown and 38 percent said they would blame Mr. Obama. (Threat of a near-term government shutdown was averted after the House of Representatives passed a stopgap bill financing the government through the end of the fiscal year.)

By way of extension, if Obama has fallen to those low “Republican levels” of support in polls about the economy, Congressional Democrats are in no better shape.  Senate Democrats just (barely) passed their first budget in four years – with a trillion dollars in tax hikes.   And if people believe those tax hikes are only for “the rich”, they are sadly mistaken.

I love it.  The phony “advantage” Democrats once enjoyed with the public over the GOP on the issue of the economy – which helped propel Obama back into the WH and led to party gains in the House and Senate –  is a thing of the past, just in time for the budget battle between the Dems and Republicans heats up.   Game on.

Oregon’s SoloPower: Another taxpayer-backed green energy program about to go bust?

Fox News reports on a story we’ve heard all too often the last several years – about the failure of a taxpayer-funded “green energy” business to the point of having to lay off workers due to poor sales/structure (bolded emphasis added by me):

When Solyndra went bankrupt and cost taxpayers up to $530 million, the Obama administration’s green energy loan program was subjected to congressional hearings and became an election-year issue. Now, another solar panel company may be headed for a similar fate.

SoloPower, which makes thin-film solar panels at a new plant in Portland, Ore., opened Sept. 27 with an upbeat ribbon-cutting ceremony. Local and state politicians gushed about the company eventually operating four production lines and creating 450 well-paid green jobs.

Just a few months later, those predictions, and SoloPower’s future, are on shaky ground.

The first production line was never completed. In January, the company had a round of layoffs. SoloPower won’t say how many of its 60 employees received pink slips.

A management shakeup soon followed – gone are the chief executive, president and chief  technology officer. The company is now trying to raise money by selling some of its equipment through a third party and is attempting to restructure its $197 million federal loan guarantee.

Has this failure to even partially live up to expectations caused the once-gushing Oregon state politicos – most of them Democrats – to have second thoughts about investing even more tax dollars in SoloPower? Of course not:

Despite the warning signs, the state of Oregon is continuing to put taxpayer money at risk. In December, the agency Business Oregon issued SoloPower a $20 million tax credit. The company sold the tax credit for $13.5 million in cash.

In order to secure the money, SoloPower had to employ 39 people and convince bureaucrats that it would still be in business in five years. The state is not giving up hope.
[…]

Solar industry analysts are not optimistic. The same economic factors that took down Solyndra and a host of other U.S. solar companies still exist. A glut of cheap solar panels on the worldwide market has driven prices so low, U.S. companies with their higher production costs can’t compete.

The former mayor of Portland seems to suggest the answer is more help from U.S. taxpayers.

“They survive by downscaling and being responsible with the resources they have,” said Sam Adams, “by reducing costs and being able to wait out, hopefully, until Congress passes new energy tax credits.”

The city of Portland issued SoloPower a $5 million loan along with other tax incentives. All told, the state and local investment is $58 million.

First things first: Since taxpayers helped foot the bill here, why isn’t SoloPower required to notify the public as to exactly how many layoffs they had last month?  This is basic information about the company’s financial operations that I believe the public should have the right to know.

Secondly, would someone pretty please lure Democrat advocates of government-funded green energy companies to one big giant room – complete with a dinner consisting of tofu, arugula,  and water served in stainless steel containers – and explain to them, make them repeat it out loud over and over again, how “tax incentives” are supposed to work as it relates to attracting business to their respective states?  The Oregonian gets it:

The economic principles are simple. The market, not government, picks winners and losers. Emerging industries are riskier than established ones. And it’s harder to succeed in a shrinking economy than in one that’s growing.

So, why did government officials rush to invest in emerging green industries amid one of the worst U.S. recessions?

Starting in 2009, green companies found an ideal political climate as they sought to expand. Concern about global warming was mounting and Democrats controlled the White House after eight years of oil-friendly energy policies under President George W. Bush. Meanwhile, the financial and housing collapse devastated the U.S. economy and put policy-makers in a mood to embrace the “next big thing.”

So governments at all levels hugged solar companies. And for a brief period the U.S. solar industry bloomed. Then it wilted. Solyndra, which received a federal loan for a California plant, filed for bankruptcy. SolarWorld, which received state and local tax incentives for a factory in Hillsboro, began bleeding jobs. SoloPower struggled to fulfill its promises in Portland, as detailed by The Oregonian’s Molly Young.

To be sure, government should encourage economic development. Sometimes, that requires incentives — including tax breaks. But incentives must be widely available and awarded based on potential for success, not based on non-economic policy agendas. Otherwise, the government is using taxpayer money to speculate.

Any questions?