Colorado Amendment 56 destroys jobs for the poor, minorities, and women
August 6th, 2008 | by Brian Schwartz |Supporters of the union-sponsored Colorado Amendment 56 (”Employer Responsibility for Health Insurance”) want to make it a crime for employers of 20 or more people not to offer them health insurance. When government forces employers to buy you insurance, employers respond by paying you less. This can put minorities and women out of a job. As economists Katherine Baicker and Helen Levy write:
There is substantial evidence that the cost of health insurance mandates will be shifted to employees, resulting in lower wages. …43 percent of uninsured workers earn within $3 of the minimum wage, putting them at substantial risk of unemployment if their employers were required to offer insurance….These workers…tend to be disproportionately low-education, minority, and female.
The consensus of the economic literature on mandated benefits suggests that employers, where possible, will transfer the cost of a new mandate fully onto employees in the form of reduced wages. This process works smoothly for employees whose wages are high enough above the minimum wage to allow for full wage shifting. Problems arise, however, when employees’ wages are too low to allow for shifting—as is the case for many of the uninsured employees discussed above. When this occurs, the mandated benefit will have the same effect as a minimum wage increase—lower employment as businesses replace workers with machines, self-service, and more efficient employees.
…the employees who will be most harmed by mandated employer-paid healthcare are disproportionately less likely to be educated, and more likely to be a minority, a single parent, and unmarried. These are the very groups that supporters of mandated healthcare often cite in support of their efforts.
Surely any politician or union that supports the employer mandate should be careful. They wouldn’t want to be accused of supporting a policy that hurts the poor, women, and minorities, would they?
Also, what’s the median wage of members of the UFCW Local 7?
(Thanks to Michael Tanner for citing Baicker and Levy’s article.)
