Thursday, September 4, 2014

Obamacare, Work and the Minimum Wage

My only begotten son has a minimum wage job and, since he is under 26 years old, is on my health insurance. He was telling me his employer is keeping his hours under 30 per week since more than 30 hours would force his employer to provide health insurance. Of course, he doesn't need insurance through his employer since he already has insurance through my employer.

I don't need to ask the question why the law was designed to do this since I know the answer: The law was poorly constructed (see King v Burwell and Halbig v Burwell.  Even though these courts reached different conclusions, they agree the law, in the aspect they were investigating, was at best ambiguous) and it was rushed through in order to avoid Scott Brown and his promise to sustain a filibuster against Obamacare.

But this brings up two other interesting issues.

First, as many have predicted, Obamacare results in less work. My son would like to work more. He can't with his current employer. Of course, he could find another part time job, but there are costs to doing that as well and potential conflicts with work schedules. In any case, the law is resulting in less work. The theory supporting that observation is one most agree with: higher prices result in lower demand.

Second, if raising the minimum wage has no impact, as many claim, on work, why would my son's employer not let him work more than 30 hours per week? After all, the health care benefit is the same thing, economically as a wage hike. Ironically, my son agrees the minimum wage should be raised. It's odd he doesn't see higher wages, all else equal, results in less work demanded. For proof, all he has to do is look at his employer's actions relative to health care.


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