November 9, 2012 Leave a comment
In the 48 hours since Obama was re-elected, dozens have companies have announced layoffs.
Why? Saying that these companies are doing this to somehow “screw” Obama as I’ve already heard some say is simplistic and misses the mark.
Uncertainty in the marketplace about regulation, the healthcare law and the looming fiscal cliff was a major hindrance on hiring over the last year. The picture is clearer now. While the fiscal cliff still looms, we know now that the Affordable Health Care Act will be fully implemented. Furthermore, the administrations enthusiastic appetite for regulations – especially in terms of the environment and energy – will continue to drive costs upward. (Related: total costs of federal regulation.) Coupled with the still stagnant economy, the effects of the administration’s policies do not create an ideal business climate.
So companies are re-trenching, hunkering down and reducing their workforce. And it’s not a surprise. Numerous large companies warned of layoffs if Obama was relected.
Reducing full-time staff in favor of part-time workers
In addition to layoffs, another defensive posture organizations are taking is reducing the number of full-time employees they have, switching them to part-time status.
Why are they doing this? The Huffington Post lays it out:
“Under the Affordable Health Care Act, businesses with more than 50 workers are required to provide health care coverage for full-time employees or those working more than 30 hours per week. Darden Restaurants, the parent company of Red Lobster and The Olive Garden, announced in October that it would downgrade workers to part-time status to limit costs from Obamacare.”
A stark view was offered in a radio call-in discussion on KXNT in Las Vegas. A small business owner named David called in with the news that he had laid off 22 employees due to Obama’s re-election, citing the costs of Obamacare.
“I had to lay off 22 people today to make sure that my business is gonna thrive and I’m gonna be around for years to come. I have to build up that nest egg now for the taxes and regulations that are coming my way. Elections do have consequences, but so do choices. A choice you make every day has consequences and you know what, I’ve always put my employees first, but unfortunately today I have to put me and my family first, and you watch what’s gonna happen. I’m just one guy with 114 employees — well was 114 employees — watch what happens in the next six months. The Dow alone lost 314 points today. There’s a tsunami coming and if you didn’t think this election had consequences, just wait.”
Who benefits from the Obama administrations’ policies?
So what’s the net effect? Higher unemployment, for sure. And increased dependence upon government programs such as unemployment benefits, food stamps and Obamacare.
Who benefits from this? Certainly not the recipients of government this government largesse. They’re going to see a reduction in their quality of life. Taxpayers – those still generating incomes – won’t benefit. They’ll be paying the tab. Shareholders won’t benefit. We’re not going to see business growth.
The beneficiaries will be the small handful of people who have a vested interest in increasing the number of people on the government dole. For them, this is job security. For them, this is re-election.
I am skeptical of any interest that does not have increasing the competitive advantage of the US and driving economic growth at its heart. And if I have this wrong, I’d love to hear an opposing view.
Companies announcing layoffs included:
Atlantic Lottery Corporation
Center for Hospice NY
CVPH Medical Center
Lightyear Network Solutions
Lower Bucks Hospital
Majestic Star Casino and Hotel
Momentive Performance Materials
Oce North America
Research in Motion Ltd.
Smith & Nephew
United Blood Services Gulf
Vestas Wind Systems