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The Affordable Care Act, or “Obamacare” as it’s come to be known, will have a few major impacts on the US employment market.  We may be seeing some of these trends already.

(1) More Part-Time, Less Full-Time.  Obamacare will force companies that hire lots of low-skilled workers to hire more part-time workers and less full-time workers.   We’ll likely see this in industries such as restaurants and retail.

(2)  Longer Hours for Full-Time Workers.  Obamacare will force companies with medium- and high- skilled workers to make their full-time workers work more hours. Instead of a 40-hour workweek, you’ll see more companies try to force 50- and 60- hour workweeks. This is because companies will now be forced to view all employees as a “healthcare cost” and by minimizing the number of employees, they minimize the healthcare costs. So, it’s likely we’ll see less work-life balance at major companies as a result.

(3)  The Under 50 Rule.  Obamacare will force some smaller companies to make a huge decision:  are they going to stay under 50 employees and avoid Obamacare, or will they go over the 50 threshold and become subject to it?  Many companies will opt for the former and might stay around 45 employees just to be on the safe side. This could help constrain overall employment. (Also, potentially constraining economic growth.) I suspect that there might be loopholes around this, but all of them involve a large amount of complexity and inefficiency, which is also undesirable.

(4) Is It Worth It? Some current and potential business owners will simply decide it’s not worth the hassle, and shut down completely. These companies will tend to be smaller companies, which simply lack the resources to deal with the complexity of the law very easily.  It might particularly harm start-ups, which probably don’t want to deal with so much regulatory red tape.

(5) The Rise of the Robots?  We’re seeing more robotics and computers used to produce goods already, but Obamacare might encourage this trend in new ways, and maybe even in places we don’t expect to see it.  (Could we see it more in the restaurant and retail sectors?)  Since the Federal government has made hiring employees more expensive and complicated, it makes sense to simply sidestep the law by using machines and computers when possible.  How big of an impact will this have? Not sure, but I think more companies will explore it.

Overall, I’d tag Obamacare as one of the major reasons why employment has not recovered more fully. By forcing every company to be a healthcare provider, the Federal government has harmed innovative, small companies that are likely to create jobs, in favor of bulky, Goliath companies that are more likely to cut jobs. This is a recipe for a stagnant, slow-growth economy; or alternatively, an economy that leaves a large chunk of the population behind.

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