With more than 2.5 million additional Americans without jobs since he moved into the White House, President Obama would do better on jobs if he cancelled the bus, saved the gas, and just stayed put in the Oval Office to work on reversing the policies he’s promoted that have only made things worse, starting with ObamaCare.
Freshman in Economics-101 learn that price hikes reduce demand. That applies to how many steaks we buy and to how many workers are added to payrolls by employers.
ObamaCare weakens job growth by increasing the cost of labor for businesses via mandated taxes and new compliance regulations.
It would be nice if every employer had the money to pay for every employee’s health insurance, and if everyone could start off at a minimum wage of $20 per hour, but Congressmen pushing a button to vote in favor of such things won’t make it happen.
Double the minimum wage or cut the price of apartments in half via rent control — with the policy goal, let’s say, of raising the standard of living at the bottom — and the result will be fewer jobs and fewer apartments.
Good intentions, in short, aren’t enough.
ObamaCare imposes taxes on companies with over 50 full-time employees that do not provide “acceptable” levels of health insurance coverage. The effect is anti-growth and anti-jobs, providing a clear disincentive for companies with fewer than 50 workers to expand and add new employees.
With healthcare costs projected to rise by 8 percent annually in the coming years, there can be little confidence among employers that the cost per employee of ObamaCare mandates won’t escalate out of control — and little confidence that the politicians will care if their mandates and taxes have the effect of forcing businesses into bankruptcy.
We saw the response of Hillary Clinton in 1993 when she was asked what could be done to ease the burden of her healthcare mandates on small businesses.
“I can’t go out and save every under-capitalized entrepreneur in America,” she retorted in her best let-'em-eat-cake style, refusing to acknowledge the role her mandates would play in producing the under-capitalization and destroying jobs.
The message from central planning was clear: Go out of business if you can’t pay for our vision.
President Obama has expressed the same anti-business haughtiness. “What I've said is that we would put a cap and trade system in place that is as aggressive, if not more aggressive, than anybody else's out there,” said candidate Obama to the editorial board of the San Francisco Chronicle on January 17, 2008.
That means that “every unit of carbon or greenhouse gases emitted would be charged to the polluter,” he explained, and every year he hoped to escalate the burden on businesses as “ratched down caps that are being placed, imposed every year.”
The impact on jobs? Said Obama, “So if somebody wants to build a coal-powered plant, they can — it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”
It’s that flawed economic thinking and anti-business stance, so common in the Democratic Party, that has increased uncertainty, reduced investment, and killed job creation.
Ralph R. Reiland is an associate professor of economics and the B. Kenneth Simon professor of free enterprise at Robert Morris University in Pittsburgh.