As the implementation of the Affordable Care Act’s many provisions inches closer and closer, new reports suggest the affordability of the healthcare law is becoming more of a myth, as many Americans could face decreased wages because of the law.
According to a NBC News investigation, union bosses and small business owners agree President Obama’s signature healthcare law is causing employers to lessen workers’ hours to less than 30 a week. The reduction is leading to the destruction of the 40-hour work week and creating financial hardships as workers see their wages decreasing.
“To tell somebody that you’ve got to decrease their hours because of a law passed in Washington is very frustrating to me,” Loren Goodridge, the owner of 21 Subway franchises, told NBC News. “I know the impact I’m having on some of my employees.”
Companies nationwide, from well-known corporations to small businesses, are reducing workers’ hours to less than 30 per week. Once an employee crosses this threshold, the company is required to provide them with coverage — a struggle for many with small profit margins.
While some businesses fear going public with a reduction in hours could harm their image, others worry that providing more employees with health insurance could cause them to raise their prices to compensate for the increased costs. This presents a conundrum for business owners who now must choose between harming consumers or their own employees.
“The consumer only has so much money in their pocket,” Goodridge said. “I just don’t feel, knowing my customers and knowing my business, now is the time to be raising prices.”
Despite a growing number of companies cutting employees’ hours — of the 20 small businesses NBC News spoke to, almost all of which were — the White House says such examples are merely “anecdotal.”
“We are seeing no systematic evidence that the Affordable Care Act is having an adverse impact on job growth or the number of hours employees are working. … [S]ince the ACA became law, nearly 90 percent of the gain in employment has been in full-time positions,” Jason Furman, chairman of the president’s Council of Economic Advisors, told NBC News.
However, even some of the President’s biggest backers are disagreeing.
“It is happening,” said Joseph Hansen, president of the United Food and Commercial Workers union. “Wait a year. You’ll see tremendous impact as workers have their hours reduced and their incomes reduced. The facts are already starting to show up. Their statistics, I think, are a little behind the time.”
Hansen joined fellow union leaders from the International Brotherhood of Teamsters and UNITE-HERE, penning a letter to Democratic leaders of Congress last month that criticized the Affordable Care Act.
“Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class,” the letter states.
“On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans,” it continues.
And employer woes stemming from Obamacare aren’t limited to businesses, either. Several colleges in Florida have reportedly cut faculty members’ hours to avoid increasing costs associated with providing coverage under the law. Officials at St. Petersburg College announced it would have to shell out more than $777,000 to cover part-time employees working more than 30 hours each week, while Hillsborough Community College estimated the cost to be more than $863,000.
Though Obamacare’s employer mandate was delayed until 2015 — allowing businesses to keep workers’ hours above 30 until then — it does little to quell the frustrations of business owners. And as Republican lawmakers continue working to defund the healthcare law, businesses are left to fend for themselves as 2015 looms closer and closer.
