Tuesday, November 27, 2007

Workers Would Lose Jobs Under Mandatory Insurance

Two Cornell researchers have shown that when the government forces employers to purchase health insurance for their employees, it will necessarily cause workers to lose their jobs:
Workers would lose jobs under mandatory health-insurance laws, report says

Laws that require employers to provide health insurance to employees will cause one in 10 of those workers to lose their jobs, according to a report on health-care reform.

The Employment Policies Institute, which sponsored research by two Cornell University economists, has released a report that’s sour on the concept of “pay or play” employer mandates, calling them “blunt instruments” to fund health insurance for the working poor.

Such laws, proposed in at least a dozen states, would require certain employers to provide health insurance to their employees or pay a fine.

Those laws may sound like a good idea to ensure low-wage workers get health insurance in jobs that don’t usually provide it, but Cornell researchers Richard Burkhauser and Kosali Simon discount that idea.

The sponsoring think tank agrees with their conclusions: “The cost of providing health insurance is so great that most businesses covered by ‘pay or play’ laws will be forced to cut back on hours and jobs just to stay afloat,” said Employment Policies Institute chief economist Jill Jenkins.
Although it's not the most fundamental reason for opposing government-mandated health insurance, it is a direct and predictable economic consequence of such bad policies, because the government is violating employers' rights by forcing employers to spend their money in ways they do not wish and are not economically viable.