Study Claims N.Y. Employer Mandate Would Cost Jobs, $9.2 Billion

April 12, 2006

Up to 100,000 jobs would be lost in New York State and businesses stand to take a $9.2 billion dollar hit under a proposed healthcare mandate, according to research by University of Kentucky economist Dr. Aaron Yelowitz and sponsored by the Employment Policies Institute.

Yelowitz said that even his most conservative estimate calculates job loss at 69,000.

Despite the high price tag, he maintaiend that this policy would ignore over 83 percent of the uninsured in New York.

The so-called “Fair Share for Health Care Act,” which is sponsored by Assemblyman Richard Gottfried (D-Manhattan) and Senator Nick Spano (R- Westchester County), would require all non-manufacturing, non-agricultural businesses with 100 or more employees to provide $3 an hour in healthcare benefits for every affected employee or pay an equivalent tax to the state.

The Employment Policies Institute study also reveals the following:

* The vast majority of the uninsured in New York are either unemployed or employed at firms with fewer than 100 employees; of the 2.7 million uninsured New Yorkers, approximately 2.2 million (83%) would not gain health insurance.

* Almost 3 million currently insured employees are affected by the bill, either because employers must offer (or pay a fee for) what ie essentially redundant coverage, or because their current health insurance is not rich enough to meet the mandate.

* As a result of the poor targeting of the mandate and considerable fees associated with millions of already insured employees, the cost per newly insured employee will be as high as $19,617 a year.

“Before other economic adjustments, the total employer obligation is in excess of $5.7 billion, and could be as high as $9.2 billion,” said Dr. Yelowitz in his study. “Job loss will occur for workers who are near New York’s minimum wage of $6.75 as well as for workers who are at firms near the 100-employee threshold. The low-end job loss estimate exceeds 69,000 during the first year of the mandate; the high-end job loss estimate is nearly 100,000 jobs.”

The Employment Policies Institute is a nonprofit research organization that studies public policy issues surrounding entry-level employment.

Source: Employment Policies Institute

For the fullt report, “The Impact of the ‘Fair Share for Health Care Act’ on New York’s Labor Market,” visit http://www.epionline.org/studies.

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