When Obama’s healthcare reform law passed, many rejoiced because they would finally have access to affordable health insurance. In addition, Speaker Nancy Pelosi claimed it would “create 4 million jobs—400,000 jobs almost immediately.”
Others predicted a new wave of entrepreneurship (and hiring) would be unleashed, as entrepreneurs chained to their jobs solely for health insurance could finally start their own businesses.
But not everyone is happy. Many companies are claiming that “Obamacare” is going to cost them hundreds of millions of dollars, which will force them to lay off employees or forgo hiring new ones.
Here are six large companies claiming that Obamacare will mean fewer jobs:
1. Sallie Mae—When Obama signed the healthcare reform back in March, Sallie Mae, the nation’s largest student lender, announced they would have to cut 2,500 jobs. They told 1,200 staffers in their various service centers they will lose their jobs by year end, and the rest of the job cuts will follow in 2011. That’s nearly one-third of the company’s total work force.
The reason for the job cuts is that the new healthcare law has a part that removes banks from the student loan business. According to Sallie Mae’s CEO, the new law “is not good for the company and it’s certainly not good for the employees.”
2. Medtronic—Healthcare reform legislation imposes a 2.3 percent excise tax on sales of most medical devices. This excise tax applies to all types of medical products, ranging from surgical instruments to bed pans, and it’s expected to bring in $20 billion in taxes to help pay for healthcare reform.
Obviously, many medical device manufacturers are less than pleased with the new tax, and several are predicting layoffs. The biggest of the bunch is Medtronic. Bill Hawkins, chief executive of the company, said his company will likely cut at least 1,000 jobs to absorb the new tax.
3. Caterpillar—After laying off 19,000 workers and losing hundreds of millions in revenue, it didn’t appear things could get any worse for construction equipment manufacturer Caterpillar. All seemed to look a bit more optimistic when Obama specifically promised that his economic plan would help Caterpillar rehire many of its laid off employees. But now due to healthcare reform, Caterpillar predicted a new cost of $100 million, nipping any plans they had to hire more employees in the bud. In the words of their spokesman Jim Dugan, “Having an additional cost like this is not great timing.”
4. John Deere—Heavy equipment manufacturer John Deere was one of the first victims of Obama’s new healthcare legislation. The company said it will face an additional $150 million in increased costs for the year in order to comply with the new laws. This eliminates about 11 percent of the company’s profits for 2010.
For a company that already moved some manufacturing plants out of the country and cut hundreds of jobs, it’s hard to imagine how these new costs could spell new jobs. If anything, expect John Deere to cut more employees in the future to help soften the blow of this new legislation.
5. Prudential—Insurance company Prudential Financial said it has taken a $100 million charge because of Obamacare. A few months later, Prudential was laying off employees at certain offices, and there was talk of some of their jobs being outsourced. For now, the job cuts aren’t huge numbers (about 60 positions have been eliminated), but there is talk that more jobs may be outsourced in the future.
6. AT&T—Telecommunications giant AT&T announced it will take a $1 billion loss in the first quarter of 2010 because of healthcare changes from the Obama administration. This charge is the biggest announced to date, and it comes from a company that began 2010 by cutting jobs. Just recently, AT&T eliminated another 136 jobs in San Francisco. While this is credited to the dying landline business, it’s hard to imagine how AT&T could add any jobs in the face of the extra charges from Obamacare.
What do you think? Is the healthcare legislation really going to add millions of jobs? Or will it cost more jobs than it creates?
14 comments
Lynn Arrington Kramer
All insurance agents will be losing our jobs in 2014. Navigators on the exchange do not need to be licensed agents. We are independent small business people advocating for individuals against the carriers and understand how benefits work. W...
e also understand the claims process how to get individuals paid but were completely left out of the pppca bill. This is a job killer read the fine (yes I have read all 2000 pages). Groups under 50 will only need coverage for full time employees. Lots of people will become contract labor or have to carry two full time jobs. Part time is defined is under 30 hours a week. Many will see an income cut. Carriers only way to deal with pricing is to reduce the provider networks to compete. Your only option for service will be a call line. We need to start writing our congress men and women democratic and republican. This isn't about Partisan politics. Jobs will be lost. We need to get this bill fixed before it goes into affect. We will all be hurt by this...
Andrea the health care
hello there and thank you on your info ? I have certainly picked up anything new from proper here. I did on the other hand experience several technical issues the use of this website, since I skilled to reload the website lots of occasions previous to I may just get it to load properly. I have been brooding about in case your web hosting is OK? Now not that I am complaining, but slow loading circumstances instances will very frequently have an effect on your placement in google and could injury your high-quality rating if advertising and marketing with Adwords. Anyway I am adding this RSS to my e-mail and can glance out for much more of your respective interesting content. Make sure you update this once more very soon..
The City On a Shining Hill
Well, the health care law is well intentioned, in that it helps those without insurance pay for that.
The problem, is the money they are paying for health care comes from taxes, and business owners already overtaxed, at 35%, the highest in the world.
All the posts advocating this health care law obviously are not self employed individuals, or they would not know the true costs, along with high taxes that are preventing new business start ups, companies from hiring and the move to outsource.
Replacing the income tax with a 10% flat consumption tax would immediately start hiring by companies again.
As long as health care providers continue to raise their rates 10% a year, our nation is facing long term economic decline. The health care law does not address this.
And, eventual bankruptcy. The health care law taxes hospitals, drug companies and medical equipment makers, in order for the uninsured to have health insurance. They pass on these new taxes to health insurers, who pass them on to govenrments, businesses and individuals.
It is best the government stay out of health care, retirement, and regulating busineses and the financial sector of this once great nation.
Well, we have a choice!!
"The problem with socialism, though well intended to help the poor and lower class by taking from the rich and those who provide the jobs and capital to grow a nation's economy, ends up making everyone poorer, from running out of those funds that keep this inefficient economic model existing"-
From a failed socialist nation called Great Britain, former prime minister Margaret Thatcher.
one great tree
Per website I've referenced . . .
The “costs” that these companies are “booking” are tax-free government subsidy payments that the companies receive to help these companies pay the cost of health care for their employees.
Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28 percent of eligible costs. But they could deduct the entire amount they spent on these drug benefits – including the subsidies – from their taxable income.
Let me reiterate that last item: before the Obama reforms companies were allowed to deduct subsidies (income they received for free from the government) from their taxable income. How's that for double dipping?
The new law allows companies to only deduct the 72 percent they spent.
It’s NOT that the companies are having to PAY OUT in cash the $1Billion or $150 Million or $31 Million, it’s that these companies can no longer “book” the unearned extra income they derived from preferential tax loopholes.
The subsidies to these companies from the government are really your tax dollars, so in fact "Obamacare" reform is SAVING taxpayer money from being wasted on corporate welfare!
This story demonstrates the lengths to which the right wing will spin facts to their political and financial advantage.
one great tree
http://www.huffingtonpost.com/2010/03/27/att-plans-1-billion-charg_n_515747.html
HF
It is easy to make outlandish claims. But when the evidence for such claims is not disseminated, it should be obvious it is all BS. It seems many people just believe whatever supports their delusional reality. Any layoffs are politically motivated due to greed. How dare the government take money out of the rich people's pockets and give it back to the poor who were largely exploited by the rich in making the rich wealthy!!!
dawn
I agree with a former comment. These are big companies, republican run, who outsourced their labor. As far as Prudential, the average insurance/finance company increased their profits by 7 billion (news stat) this last year. John Deere and Caterpillar outsourced. And medical equipment, profits are incredible.
These companies are part of the "rich" and need to bring their work back to the US. Their percentage of taxation is low compared to the in-trouble middle class who commonly pay 30-40% of their income in taxes.
I want these companies to continue being profitable, but in a way that it helps middle-class Americans.
There are a lot more details needed before handing out criticisms on the healthcare bill in relation to multi-million dollar companies.
The middle-class isn't as ignorant as politicians and media assume they are.
Go Obama.
Nancy Taylor Shivers
Medtronic and Sallie Mae: specific reasons why/how this costs them.
Other companies: Please give the specifics of WHY the new health care plan costs are causing these companies to do layoffs. Is that just window dressing on the fact that they are laying off employees because their sales are down?
TERESA
OBAMA IS A COMMUNIST QUICKLY BRINGING OUR COUNTRY DOWN TO POVERTY LEVELS. HE ALONG WITH THE ISLAM AND THE COMMUNIST ARE CRIPPLING THIS WONDERFUL COUNTRY. HE IS PURPOSELY GETTING US FURTHER IN DEPT, WE MAY NEVER BE ABLE TO BUILD AMERICA BACK IF YOU DO NOT VOTE.
KHRUSHCHEV RUSSIAN PREMIER TOLD US IN 1962, "COMMUNIST WILL TAKE AMERICA WITHOUT FIRING A SHOT" IT BECAME VERY CLEAR TO ME IN 2008 'EXACTLY' WHAT THAT MEANT 48 YEARS AGO. THEY KNOW OUR COUNTRY WILL FAIL WITHOUT GOD IN CONTROL SO THAT WAS THE FIRST THING THEY ATTACKED AND TRYING TO DESTROY. THE ACLU ARE COMMUNIST RUN, THE RADICAL MUSLIM JIHAD ARE MAKING THEIR MOVE NOW BECAUSE THEY ARE BUILDING IN NUMBERS IN THE USA, THEIR EVIL RUNS DEEP! LIVING LIFE BEAUTIFULLY IS NOT IN THEIR PLANS, JUST DEATH BECAUSE OF THE REWARDS THEY THINK THEY ARE GOING TO REAP. THEY WANT TO CONQUER THE USA AT THEIR OWN ADMITTANCE!!! THOSE OF US THAT ARE NOT MUSLIM AND DO NOT WORSHIP ALLAH THE KORAN/QURAN ORDERS THEM TO BE DESTROYED!!!! DON'T BE FOOLED, THERE ARE NO PEACEFUL MUSLIMS! IF THEY WORSHIP ALLAH AND USE THE KORAN/QURAN FOR THEIR BIBLE THEY ARE TOLD TO TAKE OUR TAXES, OUR POSSESSIONS, OUR LAND AND TAKE RULE OVER US. THEY ARE TAUGHT TO DECEIVE AND LIE IF IT MEANS FOR THEM TO GET AHEAD.
PRAY AMERICA PRAY, GOD TELLS US TO FALL ON OUR KNEES SEEK HIS FACE AND TURN FROM OUR WICKED WAYS THAT WE WILL HEAR FROM HEAVEN AND HE WILL HEAL OUR LAND. OUR GOD IS ULTIMATELY IN CONTROL OF THE FUTURE JUST FOLLOW HIS DIRECTIONS AND PRAY AND WATCH HIM TAKE OVER!!
GOD BLESS AMERICA
Dave
your caps lock is on dude
Florenzo
All I need read is "out sourced", "moved plants out of country". I also wonder if "Sallie Mae" was complaining as a result of Obama re-directing/re-structuring payment funds.
Where were these companies when two unfunded unjust immoral wars and the unfunded Sr. Medical Prescription
Bill came into account. Far far far more devistating than the monetary loss supposedly these companies will incure.
The Job Creation and Small Business Relief Act of 2010
[...] that resist its mandates. Companies such as Caterpillar, John Deere, Prudential, and AT&T responded by announcing thousands of layoffs. This is a perfectly rational reaction to a bill that [...]
Impertinent Questions: The Job Creation and Small Business Relief Act of 2010 « Doctor Zero
[...] that resist its mandates. Companies such as Caterpillar, John Deere, Prudential, and AT&T responded by announcing thousands of layoffs. This is a perfectly rational reaction to a bill that [...]
The Job Creation and Small Business Relief Act of 2010 | DBKP – Death By 1000 Papercuts – DBKP
[...] that resist its mandates. Companies such as Caterpillar, John Deere, Prudential, and AT&T responded by announcing thousands of layoffs. This is a perfectly rational reaction to a bill that [...]