February 13, 2014
Legal or regulatory changes that affect the cost of labor would fall into the category of “changes in the economic marketplace in which the employer operates.” So it would be more precise to say that employers may cut back employment for any bona fide business reason except to take advantage of the ObamaCare mandate delay.
The administration thus acknowledges that its policy creates a perverse incentive and orders employers not to act upon it. But that can’t be enforced. A business will take into account all relevant factors, including the additional costs imposed by ObamaCare, in making decisions about hiring and firing, including whether to terminate employees for poor performance, sell a division, etc. In practice, the new rule is a ban–under threat of criminal liability–on acknowledging the perverse incentive. Call it OmertàCare, a government-imposed conspiracy of silence.
I’m reminded of Argentina’s policy of punishing people who dispute the official inflation rate.