The endangered American job

The latest evidence that health care reform will never pass comes from David Espo of the Associated Press, who reports today that Senate Democrats working on the bill have removed the requirement for employers to provide health insurance to their workers.

Instead, "Democratic officials familiar with talks on the bill" say companies with more than 50 employees "would owe significant penalties if any worker needed government subsidies to buy coverage on their own."

In other words, if the company is paying a salary that's insufficient to afford health insurance, the company would be fined.

David Espo reports that the fine "could be as high as $750 multiplied by the total size of the work force."

Why don't the Democrats just make it a federal crime to hire people, and get it over with.

Let's say you run a company with 51 employees. You pay salaries that are sufficient to get qualified people to take the jobs. You also pay Social Security tax and Medicare tax and worker's comp and unemployment insurance and anything else the state and federal governments require employers to pay for the increasingly stupid decision to create jobs in this country.

If the Senate Democrats' plan becomes law, the salaries you pay your employees could be deemed insufficient by a government panel, based on factors completely out of your control.

For instance, you could hire an unmarried woman with no children, and a year later she could have an unemployed husband and twins. The salary that once was adequate to afford health insurance is now inadequate because she has to buy insurance for four people. (Imagine the discrimination lawsuits you could face if you don't raise everyone's salary equally.)

Or health insurance premiums could rise, causing the salary that was adequate last year to be inadequate this year.

Or the government could change its guidelines on who qualifies for subsidies, moving some of your employees into the category of "needing government subsidies" when they weren't there before.

According to the Senate Democrats' plan, you would be fined as much as $750 for each employee on the payroll.

This appears to be an attempt to force employers to raise salaries if they don't offer health insurance. One problem with the "public option" is that there is no way to prevent employers from dropping their employee benefits package and sending their workforce over to the lower-priced health insurance "option" offered by the taxpayers.

But imagine you're running a company. The government is attempting to set up a time bomb that could raise your labor costs suddenly and repeatedly. The government is planning to let the Bush tax cuts expire, raising your annual tax bill. The government is trying to enact climate legislation that will raise your energy costs.

If you plan on staying in business, the prudent thing to do is lay off as many employees as possible, stop hiring, stop taking risks on growth, conserve capital, and just try to keep the doors open.

This is the path to 25 percent unemployment.

If we're there by next November, John Boehner will be the next Speaker of the House. That should improve the economy all by itself, because the imminent threat of punitive, job-killing, profit-demonizing Democratic legislation will instantly vanish when Republicans get their gavels back.

In the meantime, we should all be grateful to James Madison for making it so hard to get anything accomplished in Washington.


Copyright 2009

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