Fw: Fwd: The new jobs math. True story.

Subject: The new jobs math. True story.

Darren Scott's "small" business employed 58 people at the end of 2012. His CPA notified him at the end of January that his mechanical engineering firm would be subject to the Affordable Care Act mandate due to the head count at his company. Darren told his CPA "I have all the staff I need but I need all the staff I have."

His CPA asked him "Do you need those SPECIFIC people or are the hours needed to complete your projects more important?" Darren said it is man hours that count and he had turned down other job seekers recently.

CPA's idea: move 9 employees to 30 hours per week and hire 3 new 30 hours per week employees. By doing this your company will only have 49 full time workers and your company will no longer be subject to the mandate and you will have the same man hours for projects as you did before. Potential annual healthcare savings for Darren's company: $243,500.

Let's look at the impact on jobs counted by the BLS. 9 full time workers are now part time BUT are still employed. 3 unemployed people are now employed "creating" 3 new jobs. Impact on national income: zero. Impact on national hours worked: zero. Impact on the 9 employees moved to part time: loss of 25% of income and now responsible for OWN healthcare insurance. Impact on 3 new part time employees: 100% increase in income MINUS social benefits paid during unemployment (including low/no income subsidized healthcare insurance.

Who wins? Darren as his payroll hours costs are stable but saves $243,500 pretax on healthcare premiums. Who wins even bigger? Uncle Sam as 3 families drop off the social benefits rolls along with an assumed 20% of now all 61 of Darren's employees paying to the US Treasury the cheaper alternative penalty for not buying individual healthcare coverage. Plus the government can claim that 3 "new" jobs were created in the month the shuffling/hires takes place.

No comment as to fairness of this situation. This is just reality across this country today. 

5 comments:

CharlieE said...

OMG! Obamacare is destroying our very way of life!

Not really. If every company would do this we'd be that much closer to a more affordable, more efficient single payer system. Probably not what the Right Wing wants.

Thanks for pointing out one of the many problems with the ACA, which we got only because the Republicans refused to support any other plan (and in the end, they refused to support this one, either.)

I'd like to see every employer refuse to pay for health insurance. Bring it on.

Anonymous said...

"Who wins? Darren as his payroll hours costs are stable but saves $243,500"

Sounds great. Shouldn't the headline read "Job Creators win big with new healthcare plan! Republicans rally around Obama, fight ensues as they struggle to take pictures with President".

gruaud said...

http://obamacarefacts.com/obamacare-smallbusiness.php

Anonymous said...

Strangely, this e-mail doesn't seem to be anywhere else on the Internet yet, according to Google. Nor can I find a Darren Scott with a mechanical engineering firm.

Why, it's almost like the whole thing is completely made up!

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