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Heritage
Network
We
Bet You Haven't Heard This About Obamacare
by
Amy Payne
December
5, 2013
Another
push is underway to raise the minimum wage. But what you probably
haven’t heard is that Obamacare has already done that.
The
plan on the table in Congress would raise the federal minimum wage
above $10 an hour (which is higher than all existing state rates).
Obamacare’s mandate on employers, however, is already scheduled to
raise the hourly cost of hiring a full-time worker past $10 an hour.
The
idea behind a minimum wage is to help low-income workers. But
Obamacare’s mandates will hurt the job prospects of these very
workers—and raising the federal minimum wage would further limit
the number of jobs available.
Combining
federal (or state) minimum wage rates, payroll taxes, unemployment
insurance taxes, and soon Obamacare’s employer mandate, employing a
worker full-time will cost a minimum of $10.30 an hour. The
government has made hiring more costly without raising workers’
pay.
Unfortunately,
this will make entry-level jobs harder to get. And these jobs are
important. For the majority, they are stepping stones to higher pay
and higher-skilled positions. As Heritage’s James Sherk and Patrick
Tyrrell explain:
Two-thirds
of minimum wage workers earn raises within a year. Entry-level jobs
pay off in the long run for many workers. But if Congress adds a
minimum-wage hike to the Obamacare mandate, many employees will never
get that chance.
Of
course, companies with 50 or more employees can avoid Obamacare’s
mandate by cutting workers’ hours below 30 hours per week. An
increasing number of employers announced plans to do exactly that
before the Administration delayed the mandate a year. Fewer hours is
not a good outcome for workers.
People
looking for work—or trying to hold down a full-time, minimum wage
job—are victims of Obamacare. Adding this minimum wage hike would
bring the minimum cost of hiring a full-time worker to $12.71 an
hour. This, as Sherk and Tyrrell put it, “would cut the bottom rung
off many disadvantaged workers’ career ladders.”
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