Originally posted by disgustedbyhumanity
reply to post by mikerussellus

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They should pay them a decent enough wage so that they can afford to get work in an eficiient manner, eat nutriously, have a decent dwelling, health care, and afford the other neccesities of life. That is the duty of an employer. If things are so tight that an employer needs to exploit their employees, then they shouldn't be in business.

Sure prices would go up. This would be ok because the average income would increase proportionly as well. But to make it happen we need to choke out the cheap foriegn imports which have destroyed our economy for all but those who do the importing of these cheap goods. In our quest for cheap goods made by slave labor we are in effect requiring small busineess to treat their employeeslike slave labor. When will people wake up to this fact?

Mandated employer-provided health insurance comes in three principal flavors:

* a pure mandate, requiring an employer to provide and pay a fixed percentage of an employee’s health insurance premium;

* a mandate requiring an employer to provide and pay a fixed percentage of
payroll for employee health insurance (with some mechanism to transform
unequal per capita premium payments into equal per capita policy benefits); and

* a mandate requiring an employer to provide employee health insurance or pay a tax, the so-called “pay-or-play” option.

The three are essentially the same in their effects on employers and employees as are the arguments against them, allowing discussion of only the first as representative of three, given it is the simplest and cleanest.

The Three Basic Arguments

There are three primary arguments against the imposition of mandated employer-paid healthinsurance: the policy is highly regressive as (1) the uninsured, typically though not always low income, eventually pay for their own health insurance through job loss, depressed wages and erosion of other benefits; (2) the policy is inefficient because it is too blunt to distinguish between those needing and those not needing assistance to purchase health insurance; and, it is unfair to small employers and employees because (3) the policy fails to address the real problems of the insurance market for small businesses, while retaining rigidities that injure both, and substituting a hefty, direct penalty on them, i.e., a tax, in large part because they are small and lack market power. Other arguments, such as driving off-budget massive public expenditures by laundering them through the private sector, are also valid,

The elimination of jobs is not the only option available in response to compensation increases caused by mandated employee health benefits. Employers can change jobs. Reducing employee hours is possible. For example, reducing a $10 per hour sales clerk’s hours from 40 to 37½ a week offsets some of the employer’s increased compensation cost, but also reduces the employee’s pre-tax wages by $25 a week or almost 10 percent, and cuts government tax revenues. A variant is to transform as many full-time jobs as possible into part-time jobs to escape the mandate.

Small employers have several possible employment-related adjustments available which they can impose individually or in combination with others. The most prominent is that one or more jobs will be eliminated. It is not even necessary to lay off anyone to reduce employment levels; attrition will accomplish the task and virtually no one but the Bureau of Labor Statistics will notice. Machines become a more attractive alternative under a mandate. Think computers to replace graphic designers or voice answering machines to replace receptionists. Or, products and services produced outside the United States substituting for domestically-produced ones.

The elimination of jobs is not the only option available in response to compensation increases caused by mandated employee health benefits. Employers can change jobs. Reducing employee hours is possible. For example, reducing a $10 per hour sales clerk’s hours from 40 to 37½ a week offsets some of the employer’s increased compensation cost, but also reduces the employee’s pre-tax wages by $25 a week or almost 10 percent, and cuts government tax revenues. A variant is to transform as many full-time jobs as possible into part-time jobs to escape the mandate.

Inefficient Policy

Mandated employer-paid employee health insurance is at best a blunt policy instrument used to address the problem of a specific group, one that affects a multi-dimensional 15 percent of the population, all with their personal preferences, individual needs and aspirations. The result is an inefficient policy, a policy unable to match appropriate means and ends, to distinguish between those who need help and those who do not, and to minimize the inherent inequities in any redistribution scheme.

Employer mandates subsidize some who have no reason to be subsidized, from the public let alone an employer, and provide every uninsured employee the same employer-paid subsidy regardless of their financial condition.
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Health insurance is a lump-sum benefit; the covered employee obtains a fixed benefit regardless of hours worked. The lump-sum nature of health insurance leads to another efficiency problem with mandated employer-provided health insurance, part-time employees. If part-time employees are not covered by the mandate, a huge incentive arises for employers to hire part timers because two part-timers will be $4,971 a year cheaper than one full- timer. Employees have similar incentives because insurance mandates do not raise (effectively, do not reduce) their take-home pay. “The low insurance coverage among the poorest families stems partly from the fact that most uninsured work part-time and thus are not covered by most employer mandates” [14, p.15]. There is also evidence that excluding part-timers from mandates artificially increases the proportion of part-timers in the work force

Fairness

A disingenuous argument in support of an employer mandate is that employers who do not provide employee health insurance compete unfairly; they transfer their employees’ health care costs to those offering insurance because uncompensated care raises costs to all who pay for health care, insured or not; therefore, those who provide health insurance to their employees subsidize irresponsible employers who do not. The argument obfuscates wages and compensation, and simply ignores the fact that all small employers compensate their employees for work performed. Some compensate their employees entirely in wages, other than compulsory taxes, and some compensate them in various combinations of wages and benefits. Those not compensated in part through the offer of health insurance can choose to use the wages portion of the ir compensation to purchase health insurance or not. Their choice depends on the relative value they place on health insurance, discounted by the tax subsidy provided. But since the money is theirs, the choice is theirs.

Laws which force employers to provide workers with health insurance, in addition to increasing unemployment, amount to blatant interference in transactions between consenting parties.

Employer health insurance mandates form the basis of many health care reform proposals. Proponents make the case that they will increase insurance, while opponents raise the concern that low-wage workers will see offsetting reductions in their wages and that in the presence of minimum wage laws some of the lowest wage workers will become unemployed. We construct an estimate of the number of workers whose wages are so close to the minimum wage that they cannot be lowered to absorb the cost of health insurance, using detailed data on wages, health insurance, and demographics from the Current Population Survey. We find that 33 percent of uninsured workers earn within $3 of the minimum wage, putting them at risk of unemployment if their employers were required to offer insurance.

The U.S. economy cut 345,000 jobs last month alone. The count of total jobs lost in the current economic recession is 6 million. The unemployment rate, at 9.4 percent in May, has risen to the highest level since 1983.

Rich Yamarone, director of economic research at Argus Research, said that the Fed's new forecasts were "more of a reality check than a revision," given the deterioration in the labor market and overall economy since January.

Blame insurance, not just tech, for spiraling health costs, says an MIT economist
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Now a young economics professor at the Massachusetts Institute of Technology is challenging the conventional wisdom. After studying data going back to the 1960s, Amy N. Finkelstein has concluded that the real culprit for the rapidly rising cost of health care is the massive expansion of medical insurance over the past 40 years. Sure, new technologies play a role, but doctors, hospitals, and consumers adopt them so freely largely because insurance foots the bill.
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But the more significant effect may be that insurance guarantees a steady source of revenue for hospitals and other health providers. Such ready cash encourages them to build new cardiac-care centers and stock up on the latest high-tech equipment, knowing it will be paid for. "If you produce expensive new things for medical care, people will buy them,"

According to some studies, as much as 65% of that growth could be laid at the feet of tech.

Medical expenses are rising faster than the costs of any other service. They are climbing at rates that exceed not only those of inflation and dollar depreciation but even the Federal government itself. In fact, they are consuming an ever larger share of personal and national incomes.

Some 40 years ago American medical spending was estimated at 5 percent of national income; today it is calculated at some 16.5 percent and rising continually. Several reform proposals in Congress would boost the share ever higher.