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Obamacare Self-Defense: Fire Your Workers

Written by Gary North on September 14, 2012

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.

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12 thoughts on “Obamacare Self-Defense: Fire Your Workers

  1. This is the type of stuff gangsters do: Pay them to keep your business open. They will take just enough for you to survive so you can pay more.

    If Obama calls this care I would hate to see his compassion.

  2. We need to realize, first off, that this was never meant to help uninsured workers. It was meant to enrich health insurance companies, who now have a much larger pool of customers. Instead of having to drum up business from interested parties, the government has forced everyone to buy health insurance from private companies. What a bonanza! That's why the insurance companies wrote the bill for Congress! You didn't think Congress actually wrote this 2,000 page monstrosity, did you? No one in Congress even read it!

    No, Congress got bribed with large campaign contributions and they let the health insurance companies write a bill forcing everyone to buy health insurance from them. Cool how the system works, isn't it? That's why these guys will say anything to get elected, because once in the money flows. Except for Ron Paul.

  3. It enriches LARGE insurance companies and the Givernment.

  4. Stephen Rose says:

    I remember studying in Belgium. They had enormous vending machines on the street. You could buy anything from them. Almost the entire contents of a 7/11 store. Things probably cost $100k or more. Would have been much cheaper to open a store and pay someone, but for all the govt. "protections" on labor. Another memory from the same time (1999). Grocery stores require you to do everything. You weigh the groceries, you label, you bag, etc… This is now happening here too. Local CVS invests thousands in auto checkout machines. Massive investment in capital, avoid employing people at all cost. Millions unemployed. Government "servants" solving your problems.

  5. The insurance companies will end up with fewer policies, have to raise premiums, then it will be clear to all that Obamacare didn't work. Businesses will close or face bankruptcy. There will be cries that the "government do something," and there'll be a single payer option, that is, full government health care. That was the plan all along; it will just take longer this way.

  6. It is the Chicago way. It should be called Obama-don't-care. Health Insurance is not Health Care. Any doctor will tell you they could give better care if it were not for health insurance.

  7. That IS the way gangsters work. When the Democrats noticed how much money the private sector made from health care, it decided to find an excuse to funnel all the health care cash flow through Washington before it went anywhere else, so that they could "tet their piece of the action." Small wonder that trade unions controlled by gangsters thought thsi was a great idea.

  8. The only problem government officials know how to solve is how to cash their pension checks with no photo ID's.

  9. Obamacare will kill small businesses. The only privileged workers will be public sector unions, just like in Europe.

  10. My sister who was working with Walmart part time with some benefits was fired early this year. She is eligible for rehire so it was not for lack of performance of her job. This same store is using temps who do not get benefits to fill the positions that are open now. Doesn't that sound like they are getting ready for Obamacare? No benefits!

  11. solving the very problems they created. Funny how that works, eh?

  12. What you do is fire your employees and re-hire them as INDEPENDENT CONTRACTORS. No w-4's to fill out, no W-2's at the end of the year, because you have NO employees. Your work is done by INDEPENDENT CONTRACTORS who you send a form 1099 at the end of the year. IC's are responsible for paying their own withholding and Social Security (FICA) taxes, usually via estimated quarterly taxes. The bad part for them is they also get to pay the employer's share of the FICA, since the government considers IC's to be SELF-EMPLOYED. I've been an IC for a couple of companies for 10 years now, so I know wereof I speak.