Here’s another non-obvious case. One of the implications of the PPACA is that it favors large companies over small ones which in turn will lead to slower growth in the number of new jobs than might otherwise be the case. I presume the counter-argument is that the PPACA makes free-lancing less risky than it otherwise might be.
Still, it’s an amazing coincidence that the strategy that the Congressional Democratic leadership came up with favors their preferred path for the economy: a smaller number of companies overall but companies that are larger. Big Government has always preferred Big Business.
??? The ACA essentially exempts companies with less than 50 employees, the size of your start ups. Also, health insurance costs have always favored larger companies. The literature on this is pretty old and I am pretty sure I have linked to some of it here before. I know of no evidence that shows the ACA making this worse. It will probably make it better as smaller companies have access to bigger pools. So, the ACA strongly favors the self employed and small groups compared with what existed beforehand.
Steve
The problem is that job growth is going to come from small companies growing larger. The 50 employee rule adds a significant additional hurdle to clear.
Since I managed our group through that transition, I can safely say (literature supports it) that transition existed before the ACA. The numbers show that once you get over 50 almost every company offers health insurance anyway.
http://kff.org/other/state-indicator/firms-offering-coverage-by-size/
Since very large companies self insure, they will almost always save money compared with the 50 and up groups. As I said, I have seen no evidence that the ACA will really raise costs for this group, and it may well help them cut costs.
Steve
Once again I’m very late to commenting, but we’ve been dealing with a number of economic problems and denying they’re related: New business formation is low; people continue to leave jobs at slower numbers than normal demonstrating that they’re more risk-averse; employees have every reason to chose a large employer over a small one; employers have every reason to favor part-time employees over full-time ones because benefits are only extended to full-time employees and benefits take a rising share of total compensation.
A lot of these problems are directly related to our tax code. The government could, at a pen stroke, do the following:
1) Allow employees to take the cash equivalent of benefits (perhaps only during open enrollment periods to make this orderly). Allow everyone, not just those without employer healthcare, to get insurance on the exchanges. This would ultimately create a state-wide market for health insurance, which would in turn keep the exchange risk-pool acceptable. This is only sound policy with a health insurance mandate (which we now have). Obviously, any difference from the money received to an employee from their benefits to what they actually spend on healthcare would be taxable, meaning this would be deficit-reducing to the government.
2) Create a law that would guarantee part-time employees be paid the cash value of benefits on an hourly basis. If health insurance is worth the equivalent of $4 an hour (that’s $8000/year for a 40-hour/week full timer, so not unreasonable), part time employees get an extra $4 an hour. This would reduce medicaid spending, increase the % of people on the exchanges, encourage small business formation by making it easier for individuals to find part-time work as they set up their businesses, and would end the incentives businesses have to hire 10 half-time employees over 5 full time ones. Full-time employment does more than give wage stability, it also provides scheduling predictability which is a great help to those with young children, PARTICULARLY single parents.
Remarkably, it would also reduce income inequality because of the way that incomes are calculated.