Tag Archives: Employment

Obamacare’s Impact On Jobs

Job Market

First, I admit to acknowledging the noble intention of looking to insure more Americans.  I get that tug often.  When new employees straight out of college walk through our doors, I try and bring up the subject of insurance and 401ks.  Some listen – others don’t.

So I get it.

However, all the noble intentions in the world is not going to change the fact that people, in general, will tend to make decisions that maximize their best interests.

So when the government passes a law that requires employers to compensate employees in a certain manner – look for those employers to adjust their behavior.  Duke did just that – they looked at employers:

Durham, N.C. — Corporate financial chiefs say they expect to reduce hiring and also move more jobs to part-time status as a result of the Affordable Care Act, according to a new survey from Duke University and CFO Magazine.

Many companies also are considering a reduction in health care benefits for employees.

This is exactly the response that we’ve been predicting since the law was passed.

It’s not surprising.  Iin fact, what would be surprising is that someone was surprised:

“The results were startling to us. This will significantly impact employment,” said Campbell Harvey, a professor of finance at Duke’s Fuqua School of Business. “I think the people who drafted the bill probably never anticipated such a negative effect on employment, especially in a time when we really need employment growth.”

Okay, so Duke School of Business was surprised – but it would be hard to say that folks haven’t been warned.

How bad is it?

Almost half of the 500 companies surveyed are “reluctant” to hire full-time employees, the survey found, and one in 10 may lay off current employees in response to the law.

Some people could see their hours cut below 30 hours a week because the Affordable Care Act requires companies with 50 or more employees to provide health insurance to those working 30 hours or more a week or pay a penalty.

More than 40 percent of CFOs surveyed say their companies will consider switching some full-time jobs to part-time jobs in 2014.

“For the employee, often what that means is you have to get a second job, or you just take a hit in the amount of money you make. So, it is quite disruptive,” Harvey said.

The single best method to reduce costs, increase quality and expand availability is to expose the product to an ever free’er -yet maintaining contract laws- market.  Profit motive and self interests will prevail and the more expensive objects today will become commoditized tomorrow.

So really, the question shouldn’t be, “Do we want to provide health care to everyone?”  The question should be, “What costs are we going to expose our nation to in order to provide this coverage?”

Would you trade 43 hours a week for a 37 hour week for our nation?  Would you trade a single point of unemployment; go from 6.5 to 6.6 perhaps?

How many unemployed people would you be willing to accept in order to realize the gain of insurance for all?

Those are the questions that need to be answered.

Employment: Socioeconomics vs IQ – The Bell Curve

This post continues the comparison of the impact of the socioeconomic status of individuals and the IQ of those same individuals.  I’m going off the book “The Bell Curve” written by Herrnstein and Murray.  So far I’ve covered the comparison with respect to poverty and education.  This post will deal with employment, keeping it and looking for it.

Back when I started this series, I demonstrated data that spoke to each topic using SES data only.  For example, looking at the probability of being out of the labor force for 1 month or more in 1989 bases on SES, the data showed this:

The data seems counter intuitive.  As the SES status of the family increased, the chance that a young man would drop out of the labor force increased as well.  This may be explained by the fact that wealthier families could afford to have their son’s not work for a time while those from poorer families felt a greater need to earn money.

Next we looked at unemployment.  That is, still in the labor force but not working for a month or more in 1989.  Here is the impact of SES:

There is no impact.  The SES of the individual’s family doesn’t impact the unemployment of the young man.

Let’s compare SES and IQ.

First, go back to labor force participation:

As man with very low IQ had a 4x percent chance of remaining out of the labor force compared to a man with very high IQ. Even moving in one standard deviation, the less intelligent man had more than twice the probability of staying out of the labor force than the more intelligent man.

Those men that are unemployed?


Again, not close.  While SES has non meaningful impact on the probability of unemployment, it’s clear that IQ does.  Mirroring labor force participation rate, the unemployment rate for the least intelligent is nearly 4x that of the most intelligent.

The idea that the SES of an individual or his family influences the fate of that person has significant influence in today’s debate.  And I’m sure that folks with money are more able to offset life’s unexpected challenges.  However, it may be that the intellectual ability of an individual has dramatically more impact on his or her success than the wealth, or lack thereof, of his or her family.

Employment: SES Impact – The Bell Curve

I’ve been posting data that comes from the book “The Bell Curve” in a rather chapter by chapter format.  I started with Poverty and then moved to Education.  This post deals with Employment.

I should mention that the data discussed comes from a study the authors use throughout their book.  They have decided to use this data because of the size, scope and amount of relevant data points gathered.  That study is The National Longitudinal Survey of Youth [NLSY].

From the book:

The NLSY is a very large [12,686 persons], nationally representative sample of American youths aged 14-22 in 1979, when the study began, and have been followed ever since.

In the beginning chapters of the book, the authors use the NLSY extensively.  However, the work that they have done and the results being shown in these early chapters are the result of including only non-Latino whites in the analysis.  I’ll explain the authors reasoning in following posts – or you can go ahead and read it for yourself 😉

The next sets of data will show the impact that the socioeconomic status of the individual’s background has on employment and unemployment.  First, let’s take a look at the probability that an individual has of being out of the labor force for at least 1 month in 1989:

Interesting curve.  In all the data we’ve seen so far, the curve is to the advantage of the more wealthy households.  In this case, the probability of leaving the labor force goes up as a kid’s parent’s wealth grows. *

Now, let’s look at the same group of folks in the same year but instead of being out of the labor force, let’s measure unemployment:

Virtually straight.  It really doesn’t matter how wealthy your background is when predicting unemployment.

The impact of SES on the employment and/or unemployment of individuals is hard to gauge.  I’m guessing that with further context it’ll make more sense.

* The authors felt this was strange; I don’t.  Rich kids can afford not to work.

Wisconsin Was Only The Tip Of The Spear: Collective Bargaining Rights

What started out in Wisconsin has been embraced by a large part of America.  While Wisconsin was busy becoming famous for playing the role of battle ground, states all over America were busy getting to work.

Wisconsin passed a bill which would strip much of the collective bargaining rights away from union members.  When it came to benefits, these unions would have to compete in the market just like us normal guys.

Pity that.

Wisconsin still hasn’t been able to implement it’s law, however.  A judge has ordered an injunction due to a suit brought up against the Republicans claiming that the session used to pass the bill violated open meetings rules.  I don’t know for sure if those rules were broken or not, however, the bill will become law in time.  Either with a positive ruling or by simply voting again.

But look at what it kicked off:

The Democratic-controlled Statehouse in Massachusetts voted earlier this week to strip public employee unions of their collective bargaining rights, as part of the state’s budget measure. It passed by a vote of 157 to 1.

The Massachusetts legislation would allow local municipalities to make unilateral changes to agreed-upon benefits, like health care, bypassing the need for union approval. It would, however, leave open a 30-day window where unions may be consulted on changes to benefits.

The nation is in trouble; states are in trouble.  And finally, through the actions of a few strong legislatures and 1 governor, people are beginning to see the massive damage inflicted by unions.

A Quick Study on the Impact of Taxes

Students Demanding That We Tax The Rich

The great debate of the day is The Compromise™. Or rather, what we’re gonna do about  taxes on the rich.  Obama ran on it for two years beginning in 2006.  Liberals believed; believed either that he WOULD let the Bush Tax Cuts expire or that he COULD let the Bush Tax Cuts expire.*

And he didn’t.

He neither could nor would.  And the great debate rages.

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One Minus One Does Not Equal Zero

Long long ago mothers used to tell their kids stories that would frighten them into behaving.  Monsters roamed the forests.  Trolls loomed under stone bridges.  Mostly it worked.

Then us kids invented the internet and we googled monsters, trolls and mothers.

Turns out it was all a lie.  A lie invented to trick us into acting a certain way.

Mothers may have learned that we don’t react in the same way.  Liberals haven’t.

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Why Politicians are Bad for Politics

Because it’s hard for a person who wants to get elected to tell the people doing the electing that they need to suck it up.

While I’ve only been politically jazzed for 2-3 years now I have always wondered how “other people” vote.  You know, do they vote for what’s good for them and them only or do they vote for the better of “the system”.

For example, if a road is going to run through my backyard means I lose my house but it’s good for the community, should I vote for it or against it.

Can you imagine how different a father would discipline his children if they could somehow “vote him out”?  The only reason we successfully raise our children is that we create rules that they otherwise would not generally abide.

Same for politics.

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Impact of Minimum Wage: Black Teens

Last month I posted about the minimum wage and it’s impact on teens.  Back then, I commented on how a post by Mark Perry over at Carpe Diem pushed me to finish my data analysis.

The results were drastic.  And now, I wanna show the same analysis but for black teens in America.

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Minimum Wage

For years I’ve argued that the minimum wage was a wrong minded philosophy.  This has gone back for at least 14-20 years.  For much of that time, my arguments were more along the line of “There are many people in this world how aren’t WORTH the minimum wage.”  Parallel to that argument, I would challenge people I knew who supported the idea with finding 10  jobs [I lived in Seattle at the time] that actually DIDN’T pay the minimum wage.

The point is; I’ve long opposed the idea that businesses should have t pay people more than they’re worth.

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Chinese Labor: Entering Modern Day

For years we have heard about the horrible labor conditions of third world countries.  That people are being forced to work long hours in slave labor conditions for wages that are drastically lower than corporations can pay in America.

We never hear, of course, that these laborers voluntarily put down their farming tools and made their way to the cities to find this work.  This work, that they hope, will transform their lives from one back-breaking agricultural labor to one of living the middle class dream.

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