There is no law or regulation
so well thought out and iron-clad that desperate business owners
trying to make a living can’t figure out some way to soften the
costs and burdens it imposes on them. When you’re talking about
Obamacare/the Affordable Care Act, there are lots of
intrusive rules to consider — but a major concern for employers has
been the mandate that companies with at least 50 employees must
offer “affordable” health coverage or else cought up a penalty.
That’s potentially a major expense for companies, since Obamacare
also seems to be
driving an increase in health care costs. The solution to that
dilemma … Well, let me quote an Investors Business Daily
story from last week, noting that “[t]he bullish outlook for
staffing firms is reflected in their current stock prices. The 20
stocks in IBD’s Commercial Services-Staffing group are trading at a
five-year high. The group’s value has risen about 40% over the last
four months.” In fact, that stock market vote of confidence seems
based, at least in part, on the fact that temp workers aren’t
included in the law’s mandated coverage.
Writes Jay Hancock at the
The health-care law could prove to be a boon for
temporary-staffing companies as employers outsource jobs to
sidestep complex requirements for medical insurance.
But some experts say the Affordable Care Act’s exceptions for
temporary employees could undercut the goal of expanding coverage
to more American workers.
“That could lead to an increase in part-time workers” who lack
insurance, said Susan N. Houseman, an economist at the Upjohn
Institute for Employment Research who studies staffing companies.
“You regulate something and people will always try to find a way
around the regulation.”
Starting in January, employers with at least 50 workers must
offer affordable coverage or pay a penalty. To stay under this
limit, some are considering outsourcing jobs to specialists such as
Kelly Services, Manpower, Robert Half and Randstad, whose stock
prices have soared.
“We are already getting inquiries from our client base for
companies in and around 50 [employees], asking us to help them
understand this legislation, and to inquire as to how we might be
helpful,” M. Keith Waddell, Robert Half’s president, told investors
on a conference call a few weeks ago. “Our response is that we can
legally help them remain under 50.”
This is not a unique development, by the way. In parts of Europe
where labor regulation is especially onerous, temp workers have
become the norm, laboring month to month with minimal pay and
benefits, because hiring them full-time would bind employers to
expensive long-term — even life-long — commitments. In Spain, such
workers are traditionally called mileuristas for the 1,000 euros
they earn per month. In 2011, NPR
reported on just this issue:
Spain has a two-tiered labor system. Workers have either
temporary contracts or jobs for life. It’s a key issue in national
elections Nov. 20. But it’s also the third rail of Spanish
politics, where unions are powerful, Allard says.
“When somebody talks about labor-market reform, they think they
want to turn the market into something like the U.S. market,” she
says. “But what they don’t realize is that they’ve got 30 percent
of their workers with no job security whatsoever, in really
inferior conditions, so that the others can enjoy the kind of job
security that they have.”
Thank you, President Obama, for driving growth in at least one
industry. In the future, we may all be temps. But next time you
want to bring a little bit of the European lifestyle to the United
States, may I suggest tailored suits and paella?