The effects of the less-than-spectacular launch of Obamacare and Healthcare.gov have been rippling around the country for weeks, and now the business community is weighing in, say hiring will change as a result of the Affordable Care Act. The news comes from the Duke University/CFO Magazine Global Business Outlook Survey, which polls senior financial executives around the world. The latest wrapped on December 5, and consulted 400 American CFOs.
According to the survey, nearly half of the CFOs said they are unwilling to hire more full-time employees because of the healthcare law. One in five are now less inclined to hire new employees, and one out of every ten said letting people go is another potential response to the law.
“CFOs indicate that full-time employment growth would be stronger in the absence of the ACA,” John Graham stated in the release. Graham is a Duke Fuqua School of Business finance professor and the survey’s director. Instead of taking on full-time employees, firms are now planning on hiring more part-time workers. Over 40 percent of the CFOs said their firms were going to consider this in the future.
The Affordable Care Act may also reduce employer-based health coverage. A reduction in benefits for current employees is something 44 percent of those survey said they will contemplate. Campbell R. Harvey, a professor of finance at Fuqua and a founding director of the survey, does not believe this is what legislators had in mind when the they drafted the law. ”The impact on the real economy is startling. Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA,” Campbell said.
In July, White House Press Secretary Jay Carney was asked about employers changing hiring practices based on the law. Carney was asked specifically about the 30-hour full-time threshold, and if the White House had considered what would happen if employers worked around this area of the law.
“Well, I would say broadly that if you look at the economic data, the suggestion that the ACA is reducing full-time employment is belied by the facts,” Carney responded. “What I can say is that the data reflects that there is not support for the proposition that businesses are not hiring full-time employees because of the Affordable Care Act.”
It is a point the White House Council of Economic Advisors reiterated in a September report. “Moreover, to date there is no economy-wide evidence that the employer responsibility requirement, which is scheduled to go into effect in 2015, is increasing part-time employment.”
According to Graham, Healthcare.gov, and its failings, brought a lot of attention to the law. Those problems are fixable, he explains, but the “survey points to a more detrimental and potentially long-lasting problem. An unintended consequence of the Affordable Care Act will be a reduction in full-time employment growth in the United States.”
In 2014, CFOs said they expected hiring at their companies would increase 1.4 percent. This is down from the previous quarter, when growth in hiring was projected to be approximately 2 percent. Obamacare aside, the CFOs are predicting better economic conditions in 2014, with 52 percent reporting next year will be better than 2013. The survey anticipates an increase in capital spending of 7.2 percent in 2014.