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Obamacare Hurts Private-Sector Hiring

Companies aren't hiring as the health care mandate looms

The Affordable Care Act is dragging down private sector hiring, according to newly released government data.

The Congressional Budget Office projected that Obamacare will cost nearly $1.5 trillion over the next 10 years--but that does not include the cost in its effects on the labor market, Economics 21 reported.

Data from Wednesday's Job Openings and Labor Turnover Survey showed that 4.8 million job openings existed at the end of August--the highest they have been since January 2001. But people are not taking the jobs. There were 300,000 fewer hires in August than in July, reflecting underlying problems with the job market.

These data show that businesses are hesitant to fill their job openings—or workers are hesitant to take them. With uncertainty surrounding the Affordable Care Act’s employer mandate looming large for employers, it is no surprise that hiring rates are failing to pick up.

Businesses with over 49 full-time equivalent employees were originally supposed to offer insurance plans that met broad government requirements by January 1, 2014. Now, because of delays made by the administration, employers with over 100 employees must provide healthcare coverage to at least 70 percent of their workforce or face fines of $2,000 per worker after January 1, 2015. In reality, this penalty is over $3,000 since it is not tax deductible. Growing from 49 to 50 workers will cost a business $60,000 in penalties once the mandate goes into effect for smaller companies on January 1, 2016, as the first 30 workers will be exempt. The delays did little to calm businesses worried about the costs associated with growing. Successful businesses plan for years down the road—not just for the next election.

Published under: Jobs , Obamacare