Posted by Republican Leader John Boehner (R-OH) on May 10th, 2010
American jobs are under attack by the massive health care overhaul that was rammed through Congress by President Obama over the objections of the American people. The latest evidence of the new law’s job-crushing nature comes from White Castle, the Columbus, Ohio-based restaurant chain that employs thousands of Americans nationwide.
An analysis conducted by White Castle officials and submitted to my office this week indicates that one provision of ObamaCare alone will effectively cut White Castle's net income in half and chop future job creation by at least that much. The analysis also illustrates how the law's job-crushing impact will be most severe in lower-income areas, where jobs such as those provided by employers like White Castle are needed most. The White Castle analysis comes days after the U.S. Department of Labor announced that the national unemployment rate last month rose to 9.9%, meaning at least one out of every 10 Americans is now out of work.
White Castle official Jamie Richardson explains:
“We’ve been working on this internally from a number of different perspectives. One that has [us] the most concerned is the $3,000 penalty that kicks in when an employee’s portion of a premium exceeds 9.5% of Household Income.
“We wanted to start to estimate what our potential liability will be after 2014 with regard to the 9.5% of Household Income provision, assuming all things being equal to where we are today. To do this, we pulled Household Income data for all 421 of our Castle trading areas, and used this to approximate the Household Income of team member households. (Most often our employees are reflective of the neighborhoods where we do business.) We then applied weighted averages to the different plans to determine approximately how many team members would have their premium amount exceed 9.5% of household income.
“In present form, this provision alone would lead to approximate increased costs equal to over 55% of what we earn annually in net income (based on past 4-year average). Effectively cutting our net income in half would have [a] devastating impact on the business – cutting future expansion and more job creation at least in half. Sadly, it makes it difficult to justify growing where jobs are needed most – in lower income areas.”
As Richardson's analysis shows, White Castle’s ability to provide new jobs and benefits to Americans attempting to re-enter the workforce will be significantly impaired by ObamaCare’s harsh requirements for private sector job-creators. And the problem is hardly confined to White Castle. In a May 6 column, economist Diana Furchtgott-Roth, a senior fellow and director of the Hudson Institute's Center for Employment Policy and former chief economist at the U.S. Department of Labor, warned that many American employers will encounter this senseless obstacle to job creation as a result of ObamaCare:
"Even those employers who do offer health insurance could be penalized, according to a study published last month by Mercer, a global consulting firm. Under the new law, health insurance premiums charged by employers to employees must not exceed 9.5% of their household income. As many as 38% of employers may be at risk of violating the unaffordable coverage provision, the study concluded. . .
"The irony is that in the name of expanding health care coverage the administration is making it harder than ever for unskilled workers to get started in the workforce. Clearly, the new health care bill enacted in March will have negative effects on the employment of low-skill workers.
"No employer, whether Wall Street or Walmart, should be required to offer health insurance to workers, just as they are not required to offer auto and home insurance - or is that next? But the employers of low-skill part-time workers in the restaurant and retail sectors will see the most distortions due to the new mandate.
"With 15 million Americans out of work, and millions more discouraged job seekers withdrawn from the labor force, Congress and the administration should focus on getting people back to work. Instead, with the health care bill, Washington is condemning more unskilled Americans to the ranks of the unemployed."
At least one in every 10 Americans is out of work. Any politician who believes such a statistic is cause for celebration isn't listening to the American people. President Obama's job-killing health care law should be repealed and replaced with common-sense reforms that will lower health care costs for American workers and encourage private sector job creation, not discourage it.