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Obamacare Is Blocking Job Creation, Economic Growth

“Whatever the specific numbers are in Friday's report, we know the health care law is weighing down our economy and hurting job growth.”


May 2, 2013


Obamacare Is Blocking Job Creation, Economic Growth
By John Barrasso, M.D.
IBD Editorials
May 2, 2013

On Friday the government will release its unemployment report for April. The jobs numbers last month were a huge disappointment. Americans can't afford more bad news.

Washington needs to break the cycle of weak job growth month after month. To do that, we need to honestly deal with one of the main roadblocks to job creation: President Obama's health care law.

At a press conference this week, the president proved once again that he doesn't understand how his law threatens Americans' jobs, their care and their paycheck.

Whatever the specific numbers are in Friday's report, we know the health care law is weighing down our economy and hurting job growth. We can't allow this frail economy to become the new normal.

Nearly 22 million Americans can't find a job or the full-time work they want. Millions more have quit looking altogether. Now, even more working Americans are seeing their hours cut because of the unreasonable burdens of the president's health care law.

The culprit is a requirement in the law that companies with more than 50 full-time workers provide expensive one-size-fits-all health insurance.

Some small businesses have stopped hiring in order to stay below that number of employees. Others are cutting full-time workers back to part-time status — less than 30 hours a week.

The cuts are happening across industries and across the county. The Federal Reserve reported in March that the health care law is a major concern for businesses.

Employers in the Fed's Richmond district blamed the law for layoffs and a reluctance to hire. Businesses around Dallas reported hiring the bare minimum to get by, due to uncertainty about the health care law. This uncertainty remained a drag on growth in the April Fed report.

The drop in hours and the reluctance to hire are having a ripple effect throughout our economy. Wages are stagnant. Economic growth is anemic.

Just a few days ago, we learned that first quarter GDP increased at an annual rate of just 2.5%. This dismal number is nowhere near what we should be seeing nearly four years after the recession ended.

The economy can't grow until we get Americans back to work. People can't get back to work if there aren't more jobs. Employers aren't hiring because of the health care law.

Unless Washington does something soon, the situation will only get worse. Even a key Democratic architect of the health care law recently said the law's implementation is headed for "a huge train wreck" and that small businesses have no idea what to do.

The train has already gone off the rails for some American families.

The Regal movie theater chain sent a memo to all its employees saying that it would roll back shifts to keep nonsalaried workers below the 30-hour cutoff. The company explained it was forced to take this step "to comply with the Affordable Care Act."

The new part-timers at Regal aren't alone. Hiring during the Obama presidency has been weak, and it's also been concentrated in nonsalary fields like retail.

Close to one out of every 13 jobs is now in "food services and drinking places" — restaurants and bars.

These are the exact businesses saying they'll have to cut back shifts to less than 30 hours because of the health care law. Otherwise, paying for expensive Washington-mandated insurance for all of their workers could bankrupt them. Employers forced into this position by the law have picked up a nickname. They're called "the 29ers."

Even employers who haven't decided yet to cut back hours are struggling with how to afford the law's costs. In a survey of McDonald's franchisees, one said in frustration, "ObamaCare will negatively hit us like nothing else."

The concerns go beyond bars and restaurants. The United Union of Roofers, Waterproofers and Allied Workers International recently joined the growing chorus calling for repeal of the president's health care law.

Like other unions, the roofers supported the plan when Washington Democrats were forcing it through Congress.

Now they've realized the law amounts to little more than a pile of broken promises and job-destroying mandates. The union conceded last month that those mandates could "cause a loss of work for our members."

President Obama should take a hard look at the numbers and explain to the American people exactly what the coming train wreck will mean for them. Then Congress should act to repeal the president's disastrous law.

Until it does, we will continue to see anemic economic growth, and the American people will continue to pay the price.

• Barrasso, a Republican and a physician, is the junior senator from Wyoming.

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May 2013 News and Op-Eds