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While on the campaign trail, President Obama repeatedly pledged that during his presidency he would ensure a tax increase would never be placed on the middle class.
Although Mr. Obama has never raised taxes on those making less than $250,000 a year, his famed Affordable Care Act, commonly referred to as Obamacare, has the fingerprints of poor policy and will have dire consequence on the middle and working class.
In the coming months, all employers who have more than 50 employees will be required to provide health benefits to all part-time workers employed for more than 30 hours a week.
Original enactment of Obamacare implements this mandate in 2014, but even now with a delay until 2015 businesses are presented with a dilemma that has two difficult options.
The first option is to absorb the cost, which is several thousand dollars per employee, on a job they created never with the intention of shouldering this added expenditure.
The other option is to reduce part-time workers’ hours to less than 30 hours per week. In an age where many businesses, especially ones with small balance sheets, are struggling to stay profitable or even in business, the latter option will be chosen almost every time.
Recently published U.S. Census data from the Current Population Survey of the second quarter of this year already shows the early stages of this change as nearly 150,000 fewer people worked 30 to 34 hours a week compared to last year. At the same time, almost 120,000 more people worked 25 to 29 hours a week. This shift will only widen more dramatically as the implementation date approaches.
The lasting and immediate effect is the new full time will be 30 hours a week. A worker depending on a minimum wage job at $7.25 an hour who has their hours cut from 39 to 29 a week will incur a monthly loss of over $300 and an annual loss of $3,770. People making more than minimum wage will see even more drastic cuts in take-home pay.
For thousands, perhaps even millions, of families that rely on permanent part-time employment, the cut in hours yields far worse consequences than any marginal tax rate increase the president promised to prevent.
Poor policy and poor planning will always produce poor results, and in this instance the ones that bear the burden are those in our society who can least afford it.
This letter was received Aug. 12 from Mark Schneider of Columbus.
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