Dearborn is planning to cut hours for 200 part-time and seasonal employees to 28 hours a week due to Obamacare's looming employer mandate. Under the Affordable Care Act (ACA), employers with 50 or more workers have to provide health care for all employees working more than 30 hours a week. The costs would have blown a hole in Dearborn's budget.
Dearborn is just one of dozens of cities and public school systems across the country that have moved employees to part-time status to avoid the costs imposed by Obamacare. The trend gives insight into why the Obama administration delayed implementation of the employer mandate until 2015.
Not only is Obamacare wreaking havoc for U.S. businesses, it is also threatening the budgets of municipalities.
The mandate's delay has given cities like Dearborn a breather. But pushing the mandate off another year won't deter America's move to a part-time nation. The answer to the job uncertainty is to end the mandate and give employers more flexibility in covering their own workers.
"The Affordable Care Act would have been a hit to our budget," says Mayor John O'Reilly, a Democrat. "It has imposed on us an obligation that we didn't anticipate. I'm a supporter of the concept (of the ACA), but as we move forward and identify the unintended consequences, I'd like more flexibility."
The mandate has already had profound consequences on jobs, with 41 percent of small businesses freezing hiring due to Obamacare, according to a Gallup survey. The ACA is also changing the labor force, contributing to a record 28.1 million workers who now work part-time even though the Great Recession ended four years ago.
Last year, Oakland County budget chief Bob Daddow rightly predicted Obamacare would be a threat not just to companies, but also to county and city budgets. The act's unintended consequences have hit localities in states from California to Indiana and school districts from Pennsylvania to Utah. Workers dropped to part-time from 30 hours a week have included librarians, secretaries, administrators, bus drivers and so on. City leaders in Long Beach, Calif., for example, moved 1,600 part-time employees to 27 hours a week, warning its budget would soar $2 million due to mandated health costs unless employment was redefined.
Mayor O'Reilly says no part-time employees were laid off in Dearborn, but to avoid the taxpayer expense of adding full health benefits - or paying the ACA's $2,000 fine per employee if the city didn't - their hours had to be reduced.
The cuts in hours and jobs have caused an outcry not just from businesses but from unions that in 2012 touted Obamacare's vision as a key reason to re-elect the Democratic president.
Now, say the leaders of three major unions, including the Teamsters' James Hoffa, "this vision has come back to haunt us." In a letter to Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi the unions warn that "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 law as it stands will hurt millions of Americans including the members of our respective unions."
From government to small businesses to unions, the message is clear. Obamacare as it is currently written is a train wreck threatening jobs and the economy. It must be reformed.
The Detroit News