Committee Learns How Health Care Law Hurts Job Creation, the Economy, and Workers

March 13, 2013

WASHINGTON, DC – In an ongoing effort to examine how the new health care law impacts Americans, the Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), today held a hearing to discuss “Obamacare’s Impact on Jobs.” While the law will not be fully implemented until 2014, businesses are already experiencing major consequences that impact workers, wages, employer-sponsored health coverage, and job creation. The hearing comes a week after the Federal Reserve released its Current Economic Conditions report that acknowledged employers across the country are planning layoffs and are hesitant to hire new employees because of the health law.

“In today’s sluggish economy, with depressed wages, and millions of Americans who simply cannot find work, the federal government should be encouraging businesses to grow and expand and hire more people,” said Chairman Pitts. “We should be incentivizing good jobs that provide the opportunity for advancement and increased wages. As a result of Obamacare, however, we are doing exactly the opposite. And those who are hurt the most by the law are the most vulnerable – low-wage, young Americans in the retail and service industries."

One of the law’s most significant provisions requires employers with 50 or more full-time equivalent employees to provide government-approved health coverage or face a $2,000 tax penalty per full-time employee for the 30th employee and each additional worker. Diana Furchtgott-Roth, a Senior Fellow at the Manhattan Institute, stated, “This penalty raises significantly the cost of employing full-time workers, especially low-skill workers, because the penalty is a higher proportion of their compensation than for high-skill workers, and employers cannot take the penalty out of employee compensation packages.

In an exchange with Rep. Brett Guthrie (R-KY), Tom Boucher, owner and Chief Executive Officer of Greater New Hampshire Restaurants, Inc., explained how increased levels of uncertainty, surrounding the health care law is adding further pressure on small businesses. “The key word being uncertainty and it still exists right now with regard to a fair amount of the rules that are not real clear right now,” said Boucher. He added, "There is still a lot of uncertainty."

Boucher also discussed how the law’s regulatory burden is hindering his ability to grow his business and hire more employees. “I’ve spent at a minimum 100 hours this year with my human resource person just trying to figure out the details of this law.”  Boucher added "As far as the future growth of our company? That added $200,000 is a real number that will not allow me to spend on capital improvements, build new restaurants, and as a matter of fact, we opted not to open another restaurant this year because we knew that this was coming and we wanted to see how it was going to play out truly before we made a commitment that we didn’t have the cash to do it.”

Full Committee Chairman Fred Upton (R-MI) added, “These statistics are not just projections on a sheet of paper. They have significant consequences as millions of American workers will see lower wages and less take home pay because of the law. My hope is that the president and Congress can work together to avert the real harm the law is having on employers and workers across this nation before it is too late.”

The Health Subcommittee will continue its review of the law this coming Friday with a hearing on “Unaffordable: Impact of Obamacare on Americans’ Health Insurance Premiums” at 9 a.m. in room 2123 of the Rayburn House Office Building.

To view pictures from today’s hearing, click here.

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