Employers worried about Obamacare

Published 8:57 pm Monday, August 19, 2013

1. Appeals court rejects Texas doctor’s challenge to Affordable Care Act

Former Obama administration budget official Peter Orszag seems confused. Why has the “recovery” remained jobless, when employers clearly have job openings? Why, in other words, are businesses reluctant to fill vacancies?

The obvious answer is the Affordable Care Act. It’s not only shown to be a drag on hiring, but also to be causing employers to cut hours for workers.

But Orszag doesn’t see that; instead, he offers increasingly implausible explanations for hard economic realities.

“An odd puzzle is taking shape in the labor market: Over the past three years, the number of job openings has risen almost 50 percent, but actual hiring has gone up by less than 5 percent,” he wrote for the Bloomberg news service last week. “Companies are advertising a lot more jobs, in other words, but not filling them. To get some sense of how significant this is, consider that if, since June 2010, hiring had risen a third as much as advertised jobs have (rather than only a 10th), and nothing else were different, job creation would be roughly 500,000 higher each month, and the unemployment rate would already be back to normal levels.”

But companies aren’t filling those open positions, for some mysterious reason.

“One possibility is that there is a mismatch between the work that companies need done and the skills that workers have,” he speculates. “Is it plausible that we lack qualified workers for these jobs?”

Or perhaps employers are too cheap, not offering enough money to attract good workers.

“Companies have simply not yet adjusted their wage offers,” he writes.

Or maybe businesses are hiring from within — listing jobs, but then filling them with their own employees.

“This possibility doesn’t explain why the gap is wider for smaller businesses, because larger companies have more robust internal labor markets,” he writes. “But it is consistent with anecdotal evidence that external applicants are facing more onerous interview processes and that companies are hiring outside job candidates only slowly and cautiously.”

There’s a simpler explanation. As the economy gets a little better, companies do need more workers. But they’re worried about Obamacare and a myriad of other rules and regulations this administration could hand down at any moment. Although President Barack Obama postponed the “employers’ mandate” for a year — meaning companies won’t be forced to offer insurance yet — he only added to the economic uncertainty that has slowed hiring.

“Small business owners, fear of the effect of the new health-care reform law on their bottom line is prompting many to hold off on hiring and even to shed jobs in some cases, a recent poll found,” CNBC reports, referencing a poll by Gallup. “Forty-one percent of the businesses surveyed have frozen hiring because of the health-care law known as Obamacare. And almost one-fifth — 19 percent — answered ‘yes’ when asked if they had ‘reduced the number of employees you have in your business as a specific result of the Affordable Care Act.’”

There’s no big mystery here. Employers are worried about Obamacare.

That’s why hiring remains sluggish and the recovery remains incomplete.