May 11, 2006
By Dylan Skriloff
A study published on behalf of the Employment Policies Institute (www.epionline.com) claims the recently proposed Spano-Gottfried S.7090/A.10583, so-called "Fair Share for Healthcare Act" could cost the State over $9 billion and up to 100,000 jobs.
A minimum of 67,000 jobs are at risk according to the study written by Dr. Aaron Yelowitz, Economics Professor at the University of Kentucky. Despite the high economic price for the mandate, 83% of uninsured New Yorker's will not gain coverage under the act.
The bill proposes that businesses with 100 or more employees pay $3 an hour in healthcare benefits for every affected employee, or pay an equivalent tax to the state. The manufacturing and agricultural sectors are exempted from the bill.
Aaron Yelowitz quotes the RBA's own CEO and President Al Samuels in the study. Samuels makes the point that "There are many good health plans that cost about $3,700 a year per employee. At $3 an hour for a 50-week year, the cost of this tax would be $6,000. For a company with 100 employees that differential would be $230,000."
According to Yelowitz, "Credible economic studies suggest that much of the employer cost will be shifted to workers in the form of lower wages. For those close to the minimum wage, wage shifting is not possible and employment losses ensue."
"The estimates suggest that between 37,000 and 65,000 low-wage workers will lose their jobs. I also examine the impact of the hiring notch. For firms with 75 and 125 employees…I find that another 32,000 workers will lose their jobs in the first year of implementation. In total, employment losses in excess of 69,000 jobs are likely from New York's employer mandate."
Yelowitz also points out that the bill will impact about 3 million employees already covered by health insurance, because employers must pay for redundant coverage or their coverage is not considered rich enough to meet the bill's mandates. The proposed $3 assessment would rise annually with the consumer price index medical cost increases. That number has increased 47 percent between 1994 and 2004.
The complete study, "The Impact of the 'Fair Share for Health Care Act' on New York's Labor Market," can be found at www.EPIonline.org/studies.
Samuels noted that he had identified 14 Rockland companies, with a combined employment level of 3,967, who could move their businesses to New Jersey, if this bill was to become law. In fact, one of the 14, Schiffenhaus Packaging, disclosed on April 20, that it was closing down its Suffern facility, with about 100 employees, but will continue to serve the area from its Newark, NJ facility.
Chambers of Commerce and business organizations across the State have united against the mandate. The Chautauqua Chamber of Commerce released a letter to its members calling the new tax "nothing less than government assisted economic suicide."
"Is New York in any position to impose [an $8 billion tax] on the economy? The answer is NO. Downstate would suffer lost jobs it can't afford, but pass this -- and the lights really will go out on the upstate economy," the letter reads.
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