The Case Against Employer Mandates

Posted June 19th, 2009 at 12.40pm in Health Care, Ongoing Priorities.

Stunned by the $1.6 trillion price tag for their health care plan, the Senate Finance Committee is weighing a ‘pay or play’ employer health mandate. Staffers are still negotiating which businesses will fall under the mandate, and how they are to be punished if they fail to offer “affordable” health care to their employers, but the ultimate details matter little: employer mandates are terrible public policy.

1. Employer Mandates Are A Regressive Tax. An employer mandate would be a regressive tax on business that would be directly shifted to employees in the form of reduced future wages or job losses. But don’t trust us. Obama White House National Economic Council Director Larry Summers wrote in 1989: “Mandated benefits are like public programs financed by benefit taxes… There is no sense in which benefits become ‘free’ just because the government mandates that employers offer them to workers.”

2. Employer Mandates Increase Unemployment. An employer mandate is simply a disguised tax on employment. Like anything else you tax, when employers are taxed for employing people, they respond by employing less people. Estimates suggest that an employer mandate could cost 1.6 million jobs over the first five years. Summers, again: “[Minimum] wages cannot fall to offset employers’ cost of providing a mandated benefit, so it is likely to create unemployment. This is a common objection to proposals for mandated health insurance, given that a large fraction of employees who are without health insurance are paid low wages.”

3. Employer Mandates Are A Special Interest Bailout. There is one industry that does love employer mandates: the health insurance industry. President Barack Obama explained why last year: “The insurance companies actually are happy to have a mandate. The insurance companies don’t mind making sure that everybody has to purchase their product. That’s not something they’re objecting to.”

Author: Conn Carroll
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7 Comments

June 19, 2009 » Financial News Update - 06/19/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater writes:

[...] The Case Against Employer Mandates [...]

June 19, 2009 John D. Froelich, Upper Darby Pa. writes:

Employer mandates are, indeed, a very anti-employment option. The majority of low-wage jobs are LOW PRODUCTIVTY jobs, like child care or elder care, that do not generate enuf to pay decently. That is where much of the problem remains.

June 19, 2009 Barb -mn writes:

Keep in mind, everyone, every government mandate is a government theft of the peoples liberty.

As there are high costs in health care, Mr. President, it is nice to have the privilege of health insurance that originated in the private sector. A freedom of choice to have at cost, as it should remain. Your mandate takes that freedom away. You’re also, once again, rude to the responsible. Making the responsible suffer the consequences of the irresponsible.

Have you no idea of your own, Mr. President? Always stealing from the private sector? Until there’s nothing left to steal? Is this upholding the American Constitution, Mr. President?
How about sharing with the people, all truth? Without the mixed messages.

June 20, 2009 ra,ohio writes:

Barb, I think all government officials should pay for their own health care, OUT OF THEIR PAYCHECK like the rest of us.

No more perks, ever., you wouldn’t believe the perks they get on our dime.

They are public servants after all, we are the serfs !!

June 21, 2009 Barb -mn writes:

Thank you, ra,ohio. I agree 100%. No members of all governing parties should have any amenities. The salary should have a minimum and the citizens should be the ones who determine the minimum and any increase to their salaries based on their positions of governing performance. This would eliminate alot of monetary waste. It would show true integrity of those seeking a role in government of a free people living in a FREE country.

Starting at federal and down to municipal. ex-All those in the legislation threatening priorities(fire and law enforcement) while they keep “social, special interests” going shows POOR PERFORMANCE, intimidation and neglect of priorities of ALL PEOPLE.

The ones that inspire freedom, independence and strength are the only ones that are working for what they’re paid and deserve more! But they’re outnumbered by those that work to inspire the weak by keeping them weak and giving them more and more. No expectations, no inspirations to promote independence. These are the ones destroying us all! Especially the weak, not doing for themselves!

July 17, 2009 Fix Health Care Policy | CBO: Obama Health Plan Will Weaken Economy writes:

[...] Elmendorf was just testifying about the exploding costs of the Democrats health plan. The employer mandates, the surtax on small businesses, and the individual mandates are all economy killers [...]

August 25, 2009 Fix Health Care Policy | Myths and Facts About Obamacare writes:

[...] of The Health Care System: Whether it’s a “public option”, individual mandate, employer mandate, the expansion and federalization of Medicaid, or the creation of a new health czar, the provisions [...]

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