Here's how this particular FTET works:
- Obamacare incentivizes employers to save money and escape penalties by reducing their full-time employees to part-time work. Professor Mulligan estimates that's 3M to 4M workers who are hurt annually by this provision. (By the way, that happens to be about the increase in the number of uwomen unemployed since 2012...but The Motley Monk digresses.)
- 21M full-time employees are ineligible for exchange subsidies because their firms offer health insurance. However, if their employers reduced these employees to part-time work (29 hours/week), they become eligible for subsidies. Better yet, those employers aren't penalized!
- For 4M of those employees, the subsidy paid is greater than the additional income earned from working full time.
- The negative impact will be disproportionate for older employees because they are more likely to have employer-sponsored insurance and are more expensive to insure.
Here's the ourcome: Economists are predicting that employment rates will be very low--potentially at 0%--among people who recognize that they will reap no financial reward from full-time employment. And that's to say nothing of the other federal entitlements that discourage people from working.
Ever wonder how Greece, Italy, and Spain got their national economices into such desperate economic staits? They wrote the book for the geniuses who developed Obamacare and who knew full well they were creating a FTET.
Let the discussion begin...
To read Professor Mulligan's article, click on the following link:
"The ACA: Some Unpleasant Welfare Arithmetic."