Survey: Small Businesses Are Hiring Fewer Workers Due to Health Insurance Costs
Mercatus Center, which is a research think tank at George Mason University, has released a study on how the Affordable Care Act (ACA) affects hiring at small-sized companies.
The study has found that the ACA—often dubbed “Obamacare,” because it was brought in under former President Barack Obama—may have negatively impacted American jobs.
The think tank carried out a survey on 745 respondents, who were owners or managers at small businesses across 47 states and the District of Columbia. The businesses were categorized into two groups: very small businesses, having between two and 49 employees, and slightly larger businesses, having between 50 and 199 employees.
Many of these businesses reported that they hired fewer employees or trimmed salaries in order to curtail costs related to employee healthcare insurance required under Obamacare.
Some 22% of firms with two to 49 employees said they reduced hiring or trimmed salaries for new employees as a result of the mandated insurance required under the ACA. Likewise, 24% of businesses with 50-199 workers said they changed these employment practices because of Obamacare.
Similarly, 31% of the respondents employing two to 49 employees said they were either reducing work hours for employees or hiring new employees at part-time status instead of full-time status in order to save costs associated with the ACA. Along the same lines, 32% of firms with 50–199 employees said they were doing the same, due to the ACA.
Around half of the survey respondents, however, said they did not change their employment practices in response to the ACA.
The think tank’s survey found that small business owners believed they could benefit if Obamacare is repealed. About 73% of the companies with between two and 49 employees said they would be positively affected if Obamacare was repealed. Eighty percent of the companies that had between 50 and 199 employees said they would benefit if mandatory employee health insurance is no longer required.
The head of the study, Professor Casey Mulligan, estimates that about 250,000 jobs may have been lost because of the mandatory insurance required under the ACA.
The Republican-dominated Senate under the current Donald Trump administration is currently working on a bill to repeal and replace Obama’s ACA.
“Summary Of Interesting Findings In The ACA Small Business Survey,” Mercatus Center, last accessed July 14, 2017.
“Due to Obamacare, 22% of Small Businesses Are Hiring Few Workers or Reducing Salaries,” The Washington Free Beacon, July 11, 2017.