Obama has guaranteed rising unemployment. The Federal Reserve can print money until the cows come home. Obamacare will overcome Ben the Beard’s stimulus package.
A man who owns KFC and Taco Bell stores in Atlanta explains why. If he fires low-paid workers and replaces them with machines, he saves money. If he makes them part-time, he saves money. Or he can just pay the fines. It’s cheaper than paying workers the new costs.
The program will cut his profits in half if he leaves things as they are. He won’t.
Doubt me? Read this.
Barr has 23 stores with 421 employees, 109 of whom are full-time. Of those, he provides 30 with health insurance. Barr said he pays 81 percent of their Blue Cross Blue Shield policy, or $4,073 of $5,028 for individuals, more for families, for a total bill of $129,000 a year. Employees pay $995.
Under Obamacare, however, he will have to provide health insurance for all 109 full-time workers, a cost of $444,000, or two and half times more than his current costs. That $315,000 increase is equal to just over half his annual profit, after expenses, or 1.5 percent of sales. As a result, he said, “I’m not paying $444,000.”
If he refuses to pay, he will be hit with a $158,000 fine. That is the cheapest option for him.
But that’s not all. His experience tells him that most low-wage workers he would have to cover under Obamacare won’t take it because their $995 share is too high, meaning those the program was set up for won’t see any benefit. And those who do will because they have major health issues, likely resulting in higher premiums to him.
They will not get covered. They may think they will. They are wrong.
They will probably get fired or made part-time workers. Their income will fall.
This follows Ludwig von Mises’ law of government economic action: when a government announces a new economic policy, the opposite will happen.