Over at Slate, that site’s economics blogger Matt Yglesias shares the bafflement of the New York Times’ Stephanie Clifford on Walmart’s store staffing. The chain has cut back the number of staff at its stores by an average of about 50 since 2007. Walmart corporate leadership is aware that it has more work to do than staff to do it, but is reluctant to hire more, and is instead trying to muddle through with some new signs to direct customers around.
Muddling through has become the new normal for American business and families in the Obama era.
Cue Yglesias (who has never run a business in his life):
Last I checked the U.S. unemployment rate was still 7.7 percent so it’s not like Wal-Mart couldn’t possibly find people to staff these positions. Unfortunately in life a lot of bad decisions are driven by a desire to avoid owning up to past bad decisions.
Whose bad decisions, Walmart’s or the Democrats’? Just try getting a professional Democrat operative to admit that ObamaCare and the president’s environmental and tax policies are having less than perfect effects on the economy. As of today, the unemployment rate is officially 7.6%, but the real unemployment rate is over 10% and 90 million Americans are now out of the workforce. Why? It must be Walmart’s fault.
Fixing this problem by increasing the number of employees per store would be tantamount to admitting that staff levels had been cut back too far in the past. So management seems to be casting about for some other solution related to signs and inventory systems. But Wal-Mart is a (famously!) low-wage employer and half the virtue of not paying your employees very well is that it’s cheap and easy to add more employees if you need to.
Not anymore. ObamaCare took care of employers’ flexibility to hire more staff. Survey after survey shows that employers want to hire, but fear bringing on more staff because they’re unsure what their liabilities will be for each new hire. Some are cutting staff hours back to below the magic ObamaCare 30 hours per week, to avoid having to deal with the law. Others are staffing up to a level the law allows, but going no further than that. The Democrats’ health care law has even spawned a new phenomenon: Job sharing.
It’s already happening across the country at fast-food restaurants, as employers try to avoid being punished by the Affordable Care Act. In some cases we’ve heard about, a local McDonalds has hired employees to operate the cash register or flip burgers for 20 hours a week and then the workers head to the nearby Burger King BKW -1.38% or Wendy’s to log another 20 hours. Other employees take the opposite shifts.
Welcome to the strange new world of small-business hiring under ObamaCare. The law requires firms with 50 or more “full-time equivalent workers” to offer health plans to employees who work more than 30 hours a week. (The law says “equivalent” because two 15 hour a week workers equal one full-time worker.) Employers that pass the 50-employee threshold and don’t offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. So by hiring the 50th worker, the firm pays a penalty on the previous 20 as well.
These employment cliffs are especially perverse economic incentives. Thousands of employers will face a $40,000 penalty if they dare expand and hire a 50th worker. The law is effectively a $2,000 tax on each additional hire after that, so to move to 60 workers costs $60,000.
The heavy hand of ObamaCare is lurking behind every single hiring decision a business makes now. But you’ll never get someone like Yglesias to admit that.
Every time an employer points these facts out, liberals like Yglesias respond with some variation on “You’re doing it wrong!” People who have never run a business, who have in fact built careers on tilting against free enterprise and treating businesses as if they’re government social programs, think they know business better than business leaders do.
Arrogance and ignorance make for a bad combination. Unfortunately most liberals combine both in a big way.