Congress's Health Care Reform Problematic For Small Businesses

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The tire store will cut back on advertising so it doesn't need 8 employees so it can let one of them go. They can cut back advertising as much as they would pay the employee and his health care coverage and be just as well as they would if they kept him on.

Ryan of UT 7:11PM March 23, 2010

No business will lay off a person unless that person is simply not needed to run the business. The notion that any added cost to a business causes an equal-priced layoff of an employee simply is not true.
If the oil-change shop needs eight people to operate with the sales it has, it will have eight people. If it only has enough customers to need seven people, then it will lay one off. What it won't do is slack off on having the exact number of people required to serve its customers--assuming the service itself has a gross profit margin. What it "might" do if demand exists is add a 9th and 10th person to do more business to cover any additional new cost.
Now, if you're arguing that America having universal health care would somehow cause all people to get less oil changes, that would be different. But, I don't believe that's the case. I cannot help but believe that universal health care will be one of the best things that could possibly happen to the business community as a whole.

Muser of NM 8:10PM July 16, 2009

Muser of NM, in your example, that $20k has to come from somewhere and letting go 1/10 or 1/8 workers just doubles the unemployment rate.

Not so stupid of UT 3:30PM July 16, 2009

So in a time of recession we have Congress busily adding new disicentives to hire workers. Also the minimum wage is going up again and more taxes loom for high income earners. And the Bush tax cuts are going to expire next year.
This should work out well.
Colin
http://togetrichisglorious.blogspot.com/

Colin of DC 1:15PM July 15, 2009

My morning paper says the "penalty" that an employer would have to pay for not offering health insurance (if it has a payroll over $250,000) is 8% of payroll. Are we to believe that a small business with ten $25,000/ea workers or eight $31,125/ea workers would not be DELIGHTED to pay an aggregate penalty of $20,000 to have the health care monkey off its back?
Considering that you just read (above) that a traditional plan (presumably including dependents) can be priced at $750-$750 per month (or $9,000 - $11,400 per year) per person?
And what "federation" exactly says that businesses with 5-9 workers have average annual payrolls of $375,000? For the average of "7" employees, that would be an average salary of $53,571 per worker.
They're including the OWNER there to get numbers like that-- owners who probably get a salary at least 5 times what he/she is paying each of the others. The average tiny business (let's say, a flower shop or an oil-change shop) is most certainly NOT paying everybody $53,571 a year AND YOU KNOW IT. Why put hogwash in articles?

Muser of NM 12:49PM July 15, 2009