Employer Mandates Result In Lost Jobs

Posted on December 24, 2009

In addition to the concerns Janet Trautwein mentions in the Dec. 20 guest column “Health reform will drive up prices,” many policymakers fail to acknowledge that mandating employer-provided health insurance — particularly through a “pay-or-play” mandate — will result in lost jobs.

Research from Cornell University notes a large number of low-income employees often fail to receive health coverage because of a mandate to provide it. Such mandates artificially raise the market price for low-skilled employees, causing employers to change their hiring practices and often cut jobs. Research from Harvard University and the University of Michigan found that employees earning close to the minimum wage, a majority of whom were high school dropouts or minorities, were most likely to be at risk of unemployment were an employer mandate enacted.

Elected officials tasked with finding a health care plan most beneficial to the public must recognize that many times employer mandates are detrimental for job growth, especially for vulnerable, entry-level employees.

Kristen Lopez Eastlick
Senior Economic Analyst
Employment Policies Institute
Washington, D.C