Topics: Health care, Health insurance, Healthcare reform Pages: 7 (1306 words) Published: April 22, 2014

ObamaCare is Driving a Wedge Between the Socio-Economic Classes.

Presented to
Mrs. Elham Rouhani

ECON2106-Microeconomics (40956)

Arianit Gruda, Nicole Kalgren, Richart Stephens,Tanyi Njehliweh

March 22, 2014

Arianit Gruda, Nicole Kalgren, Richart Stephens,Tanyi Njehliweh ECON2106-Microeconomics (40956)
Elham Rouhani
ObamaCare is Driving a Wedge Between the Socio-Economic Classes. The Affordable Care Act is amplifying the difference between socio-economic classes because the ACA encourages employers to cut employee hours. The mainstream of college students hold jobs while studying so that they can pay rent and phone bills, and occasionally go to the movies or out to dinner. We get the money for these bills and happenings through bi-weekly paychecks. We work hard, usually for forty to fifty hours a week, and are compensated near minimum wage. Although miniscule, it is still enough to cover the daily expenses in our lives and to have a bit left over for extraneous items, however if hours are lost then this will not be the case for us students. Big businesses for example, are often the ones who disburse paychecks to people attending college. They offer entry-level jobs that are easy to come by, are constantly expanding, and have a high turnover rate. Large corporations, such as Regal Entertainment Group, Five Guys Burgers, and Petco, are cutting employee’s hours down to less than thirty a week. The Affordable Care Act (ACA) supports employers to provide health insurance to employees working full-time (thirty-plus hours weekly). By cutting the hours, people are no longer are entitled to health insurance provided by the employer. The lower class of the U.S. economy consists of a demographic of people whose hours are being cut. A continuing decline of hours will only result in more financial burdens on the employees. Losing eleven hours could mean an individual who manages paying for groceries as well as car insurance with the same paycheck may have to start choosing between the two when receiving future checks. In addition to cutting hours, many employers are limiting hiring to avoid spending more money on health coverage. Robert Samuelson supports the idea that the ACA’s costs and complexities are going to deter some companies from hiring, and that it would be divisive to the socio-economic classes. In “Both Sides May Lose the battle over Obamacare” from October 25’s Register-Guard, Samuelson states that as a result of employers not being able to afford health care for all employees, hours must be cut. A business only has reduce hours to under thirty a week in order to avoid paying health care. Once this cut is made, a previously full-time employee is taking home 100-200 dollars less each paycheck. This unfortunate trend will continue and even increase: 15% of larger employers and 20% of small businesses plan to reduce employees’ hours or benefits according to a recent survey by the International Foundation of Employee Benefit Plans. Small businesses play an important role in the U.S. economy and are a strong driver of job growth and innovation. But small business are severely disadvantaged by the current U.S. health care system relative their larger counterparts. A new report by the Council of Economic Advisors (CEA) examines the challenges faced by smaller firms under the current health care system, and the likely impacts of health care reform on small business and the workers they employ. This implicit tax disadvantages small firms in both the market for the best workers and the market for their products. For example, both Trader Joe’s and Home Depot have stopped providing health care to part-time employees, and Forever 21 plans to cut hours and reclassify some employees as part-time. In fact, businesses all over the country, compelled by the financial strain introduced by the ACA, are making similar decisions. Once the ACA goes into...

Cited: Conover, Chris. "Who Can Deny It? Obamacare Is Accelerating U.S. Towards A Part-Time Nation." Forbes. Forbes Magazine, 31 July 2013. Web. 29 Oct. 2013.
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McVeigh, Karen. "US Employers Slashing Worker Hours to Avoid Obamacare Insurance Mandate." The Guardian. The Guardian, 30 Sept. 2013. Web. 28 Oct. 2013.
Myers, Lisa, and Hannah Rappleye. "Obama Admin. Knew Millions Could Not Keep Their Health Insurance." NBC News. NBC, 28 Oct 2013. Web. 29 Oct. 2013.
Nicks, Denver. "Trader Joe 's Explains Why It 's Cutting Health Benefits For Part Timers." Swampland.Time.com. Time Magazine, 17 Sept. 2013. Web. 28 Oct. 2013.
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