Unintended Consequences, Or Not So Unintended

From TownHall:

Obamacare’s employer mandate has small businesses scrambling to reduce their workforce in anticipation of the law’s implementation in 2014. Under the employer mandate, businesses with 50 or more full-time employees have to provide coverage or pay a $2,000 penalty for every worker minus the first 30. Growing businesses have discovered that expanding their workforce beyond 50 fulltime workers is simply too burdensome. In order to survive, many of these companies will have to either scale back the hours of existing employees so that they are no longer classified as fulltime or let them go altogether.

When all of your employees are part-time, you’ve suddenly saved a lot of headaches. No more vacation or sick benefits, no pension or 401k contribution, and certainly no medical or dental. But it’s a net loser for the workforce.

But at a basic level it’s worse: It directly penalizes growth and hiring.

Simultaneously, Weasel Zippers is reporting that Steny Hoyer thinks Foodstamps and Unemployment are great generators of economic stimulus:

“If you talk to economists, they will tell you there are two things that are the most stimulative that you can do — one’s unemployment insurance, the other’s food stamps, okay?”

“Why is that?” he said.  “Because those folks who receive those resources must spend them. And they’ll spend them almost upon receipt. Most economists with whom I talk believe that those with significant discretionary income, that that’s not the case.”

Unbelievable. Here’s the thing. Compare and contrast:

If you’re employed, you’re earning your own income. Maybe it’s only enough for one room of that apartment with a co-worker, but it’s a start. Hopefully you’re learning a skill and practicing it daily at work. With time you may become good at it. The Boss may notice and increase your hours or your pay, or both (because you’re good for business); plus the Boss gives you better work to do that requires higher-level skill. Now you’re out of that apartment and renting a little house. So next you work at becoming very good at the new skills. Time and practice, work and patience… Then the Boss may notice you’re still good for the business and give you a bonus, or even provide basic benefits; plus he gives you an assistant manager position. Now you move into your own home.

If you’re on Foodstamps and Unemployment, there are only two ways to improve your socioeconomic status: have babies and develop a disability. Neither of these is considered a “marketable skill.” There is no progression, no development, no independence. It’s living hand-to-mouth.

Steny Hoyer is a Democrat. Steny Hoyer wants you on Foodstamps and Unemployment. Steny Hoyer says it’s the best thing you can do to stimulate the economy. Connect the dots…

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