“Son of 72” sequel as bad as the first

Research shows employer health care mandates result in lost jobs and have little effect on increased coverage
  • Publication Date: November 2005

  • Topics: Health Care

Washington D.C.–The Worker Health Care Security Act introduced today is strikingly similar to last year’s Proposition 72 which, according to research by the Employment Policies Institute (EPI), would have resulted in lost jobs for Californians. Proposition 72, which was defeated in last year’s November general election, would have required all employers in the state with 20 or more employees to provide full medical insurance for their employees. The EPI study on Proposition 72 highlighted the devastating effects of health care mandates and concluded that Proposition 72 would have cost California businesses up to $12.9 billion per year and potentially resulted in over 150,000 lost jobs.

The study was conducted by Dr. Aaron Yelowitz, a nationally respected labor and health economist at the University of Kentucky and a research fellow at the National Bureau of Economic Research. Prior to the University of Kentucky, Yelowitz spent seven years as an economist at UCLA.

Looking at the high number of lost jobs associated with Proposition 72, Yelowitz noted that most of the displaced employees would have been younger, poorer, less educated and disproportionately minority. For example, while Hispanics make up only 30 percent of the workforce, they would have had to bear 53 percent of the job loss.

More troubling than Proposition 72’s high price tag and potential job loss was the fact that the majority of the uninsured would have still remained without coverage. Only 3 out of 10 of the previously uninsured Californians would have received new coverage. Only 30 to 35 cents of every dollar spent under the initiative would have gone toward covering the uninsured.

“Supervisor Ammiano calls his coverage ‘ universal,’ but the only thing universal about the Worker Health Care Security Act is the universal damage it will do to San Francisco’s economy,” said Mike Flynn, EPI’s Director of Legislative Affairs. “Expanding insurance coverage is a laudable goal, but you can’t wave a wand and do it by legislative command. His proposal would slap San Francisco’s businesses with staggering costs and lead to tremendous job loss among the city’s least skilled workers.”