The Patient Protection and Affordable Care Act – aka Obamacare – was expected by economists to cause economic changes. (Here is the act in a handy 906-page .pdf file.) Some predicted lower employment, either from employers’ reducing employees’ hours to keep them from being deemed full-time, or simply by firing employees whose marginal productivity isn’t more than the $300+ additional cost, per month, of complying with some of the employer mandates.
Put simply, mandating increased per-employee costs will cause employers to react, and the employees most at risk of losing hours or jobs will be the ones with the lowest productivity: the minimum-wagers the government says it’s trying to protect. Any time the government takes control of (more of) an industry, the result inevitably will be unintended consequences. People seek to do what produces the best outcomes for themselves; we are not the static, obedient walking statistics government pretends we are. We actively seek ways to avoid burdens, because we need to feed our families...
Those of you who told Trader Joe’s you won’t shop there any longer because they’re not covering health care for their part-timers should first read Trader Joe’s explanation (Trader Joe’s will give the employees cash and let them shop for themselves; that way, the employees get a tax break, and at any rate Trader Joe’s can’t offer the giveaway deal the government is forcing on everyone); and second, should be prepared not to shop in very many places any more: Forbes writes of Walgreen and 17 other large retailers doing the same thing. Worse, 301 employers (that we know of so far) are cutting employee hours and firing people. The most perverse part of that: 62 of the employers are private-sector, and 239 are government employers, including school districts. In one survey of small businesses, 41% have delayed hiring, 20% have reduced hours, and 20% have reduced payroll, all because Obamacare would be too burdensome otherwise.
Another unintended consequence of creating government tax-and-spend “giveaways” that (as we saw above) threaten to harm the poor more than the rich: Fraud. Obamacare-related scams were and are being predicted—by federal officials, no less. Thieves are expected to prey on the poor, the old, and the ignorant. The fear is strong enough that the White House and the Justice Department have felt the need to reassure the public, with DOJ having to build a special initiative around the issue. Here’s a list of the scams that have already been reported to law enforcement.
Some unintended consequences were not predicted by many, if at all. Labor unions, the darling of the political left, are stung because they somehow could not foresee that employers would cut hours; and the Obama administration remarkably has refused to add special subsidies for them...
Obamacare subsidizes the health care of people who stay below certain income maxima. The obvious and foreseeable unintended consequence of that, of course, is that some people at the margins will face incentives to earn less. A dollar of additional income, for some, will mean losing a $5,000 subsidy. It would be foolish for anyone facing that choice to work an additional hour and lose almost $5,000.
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