June 21 2013

ObamaCare Fears: Nearly Half Small Businesses Not Hiring

Charlotte Hays

Want to know why hiring in the U.S. remains sluggish?

This may be the reason:  

Forty-one percent of the businesses surveyed have frozen hiring because of the health-care law known as Obamacare. And almost one-fifth—19 percent— answered "yes" when asked if they had "reduced the number of employees you have in your business as a specific result of the Affordable Care Act."

The poll was taken by 603 owners whose businesses have under $20 million in annual sales.

Another 38 percent of the small business owners said they "have pulled back on their plans to grow their business" because of Obamacare.

Employers are particularly concerned about the requirement that companies with 50 or more employees provide government-approved health insurance policies. The alternative is that the business must pay a fine of $2,000 for each fulltime worker after the first thirty.

It is amazing that the authors of the ObamaCare legislation didn’t anticipate that making hiring more expensive would reduce hiring. But this is just the beginning:

"If the small businesses' fears are reasonable, then it could mean that the small business sector grows slower than what economic conditions otherwise would indicate. And small businesses have been a growth engine in the economy," [Steven] Friedman [of Littler Mendelson, a firm which specialized in employment law] told CNBC.  

But cheer up. ObamaCare means more hiring in one sector beloved by President Obama: the government.

In addition to those 16,000 new IRS agents (yikes!) to enforce ObamaCare, tens of thousands of “health care professionals, union workers and community activists hired as ‘navigators’ to help Americans choose Obamacare options starting Oct. 1.”

So it’s a good time for “community activists.” Small businesses? Not so much.

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