Despite then Speaker Nancy Pelosi’s claims that the Democrats’ health care law would create “4 million jobs, 400,000 almost immediately,” a study by the Coalition for Affordable Health Care Coverage (CAHC) tells a strikingly different story. The report, which examines the relationship between health care costs and overall employee compensation, portrays a dark future of high health care costs and fewer jobs – particularly for those on the lower end of the wage scale. Findings include:
- As a variety of mandates go into effect that influence the type and cost of plan an employer may offer under the Democrats’ health care law, health insurance premiums could consume 100 percent of wage gains for the bottom 30 percent of wage earners. This means that 30 percent of American workers would not see annual pay increases because that money would instead be used to cover higher health care costs.
- Increases in health premiums over the next four years could exceed productivity increases of the lowest-paid third of the workforce – making the decision to hire or retain these workers more difficult for employers.
- As employers struggle to afford those new costs, many employees in low-wage industries will be more likely to lose their job or find it more difficult to secure future employment.
The result? Increasing health care costs makes hiring and retaining low-wage employees an even tougher reality. If health insurance premiums continue to increase, then employers, with finite resources and growing regulatory obligations resulting from the Democrats’ health care law, will be forced to choose between complying with the new mandates, fees and fines versus hiring new and retaining existing employees.
Growing health care costs, higher costs of doing business and fewer jobs for those who need them the most are all the exact opposite of what our nation’s economy needs to get back on track.