The $6-an-Hour Health Minimum Wage

Most people intuitively know that the worst thing government can do in the middle of the deepest recession in 70 years is enact policies that increase the expected cost of labor. Yet that is exactly what happened last spring, with the passage of the Affordable Care Act (ACA).

How bad is it? Right now we’re estimating the cost of the minimum benefit package that everyone will be required to have at $4,750 for individuals and $12,250 for families — understanding that the proclivity in this Congress and in this Department of Health and Human Services is to add benefits, not reduce them, making the package even more expensive. That translates into a minimum health benefit of $2.28 an hour for full time workers (individual coverage) and $5.89 an hour (family coverage) for fulltime employees.

Granted, the law does not specify how much of the premium must be paid by the employer versus the employee — other than a government requirement that the employee’s share cannot exceed 9.5% of family income for low- and moderate-income workers and an industry rule of thumb that employers must pick up at least 50% of the tab. But the economic effects are the same, regardless of who writes the checks.                                                                                                  

In four years’ time, the minimum cost of labor will be a $7.25 cash minimum wage and a $5.89 health minimum wage (family), for a total of $13.14 an hour or about $27,331 a year. (I think you can see already that no one is going to want to hire low-wage workers with families.)

What difference does all this make?  Economists have been studying the labor market for a long, long time and there are three principles that are well established in the literature:

  1. Total employee compensation tends to equal the value of what workers produce — that is what they add to overall output, at the margin.
  2. Noncash benefits (e.g., health insurance) substitutes dollar-for-dollar for cash wages.
  3. If the minimum compensation required is higher than what workers are able to produce, they will be priced out of the labor market.

To confirm these principles, economists use sophisticated mathematical models and conduct elaborate statistical tools. But everything that is really going on here is what ordinary common sense would predict anyway.

Imagine you are an employer. You certainly aren’t going to pay an employee more than his value to the organization and competition from other employers will tend to prevent you from paying less. What matters here will be the total cost of employment, not the individual components. If your employees would rather have more in health insurance and less in wages, you will likely comply. If the government forces you to spend more on health insurance, you will spend less in wages in order to pay for the mandated benefits.

For above-average-wage employees, this is all straightforward. Expect wage stagnation for the next four years, as employers use potential wage increases to pay for expanded health benefits instead.

At the low end of the wage scale, however, the effects of this new law are going to be devastating. Low-wage workers at Walmart and such fast food chains as McDonald’s either have no insurance or they are enrolled in “mini-med” plans with limited benefits.

Ten-dollar-an-hour workers and their employers cannot afford $6-an-hour health insurance. If they bought it, only $4 would be left for cash wages and that would violate the (cash) wage law. Further (and this may come as a surprise to readers) although health economists have known for decades that these are the workers who most need help in obtaining insurance, there are no new subsidies for them in the ACA! Zero. Zip. Nada. There are some small business subsidies tacked on in a Rube Goldberg fashion. But there is nothing to help employees at Walmart and McDonald’s or Denny’s, or KFC or any other restaurant chain buy health insurance!

This is undoubtedly why McDonald’s told the federal government the other day that it was considering dropping its mini-med insurance for 30,000 employers. No doubt millions of other workers will be in the same boat.

Of course, McDonald’s won’t get off scot-free when its employees seek subsidized coverage in the newly created health insurance exchange. It will have to pay a fine of $2,000 per worker — that’s about $1 per hour for a full-time employee and a lot more for a part-timer. Plus, does anybody really believe that the fine is going to remain at $1? As more employers dump their employees onto the exchange and as the cost to taxpayers rises, the potential pressure to increase the fine will become inexorable. Note that one-third of uninsured workers earn less than $3 above the minimum wage. These workers and many others are at risk of losing their jobs.

What will happen when millions of people are priced out of the labor market? That’s hard to say, but the past may provide a guide. I remember a time when teenage waitresses brought real food to customers who ate it on real tables; teenage boys and girls served as ushers with flashlights to help moviegoers find their seats in the dark; teenage boys pumped gasoline for filling station patrons; and teenage boys mowed lawns and rode bicycles to deliver the morning newspaper to people’s doorsteps.  Most of these jobs and many more have been priced out of existence by minimum wage laws and other labor market regulations — leaving us with a teenage unemployment rate that is double digit even in good times (currently at 23.1%) and a black teenage unemployment rate that is double that of whites (currently 49.1%).

Bottom line: expect huge labor market upheaval and high unemployment, looking indefinitely into the future.

I will close with three end notes:

End Note 1: There is some disagreement among economists about the effects of small increases in the minimum wage and interested readers may want to consult this literature review. But the increases here are not small.

End Note 2: It is tempting to conclude that the White House and the Democratic leadership in Congress are absolutely clueless about labor economics. Am I right? Or can you think of another explanation for the ACA?

End Note 3: Exercise for the reader: Show why it doesn’t matter how the premium is shared between the employer and the employee unless you are bumping up against the minimum wage.

Comments (42)

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  1. Devon Herrick says:

    This type of regulation has the potential to create a permanent underclass of low-skilled, unemployed workers who never got their first (bad) job that would have been a step up the ladder to a better job in the future. By mandating a minimum wage well beyond what their skill set would provides, they never get hired in the first place.

  2. Vicki says:

    Very interesting way of explaining what is going on with Obama Care.

  3. Bruce says:

    You are right about one thing: expect continued unemployment.

  4. Ken says:

    Hard to believe that this happened during the worst recession in 60 years.

  5. Neil H. says:

    It looks like low-income workers are going to be priced out of the labor market.

  6. Matt says:

    We work with mid market employers (200 to 3,000 employees) throughout the U.S. Most offer their employees and their dependents major medical insurance. Some employers offer their part time employees a mini-med type plan. Others offer a combination of both. Two things that I would like to share:

    1. More than half of the employers have stated that they will drop their health plans effective 2014, pay the $2,000 fine and contribute a minimal amount so that the employee can obtain coverage elsewhere.
    2. The employers that have a mini-med plan have applied for the exemption to keep the mini-med plan. All exemptions have been rejected thus far. It is pretty clear that you have to be a major employer like McDonalds with media attention in order to be granted the exemption.

  7. Nancy says:

    I didn’t realize there is a real anti-family bias built in here.

  8. Mike S says:

    @Matt: You are speaking to an area that I don’t believe is getting the press one would expect (although I may be confused). As I understand it, an employer (over 50 employees)can pay a $2,000 annual penalty and send his employees to the exchanges. If I am an employer paying say- $350/$1,200 per MONTH for single/family coverage why wouldn’t I discontinue coverage? Isn’t this a no-brainer? And I am sure the $2,000 penalty can/will be ratcheted up in future years. So is this also part of the plan? Employers bail in 2014, then once they are in the barn ratchet up the penalties?

  9. Ron says:

    Passage of the PPACA last spring showed me that, 1)what we were all taught in elementary school about how our government works doesn’t hold any water; and 2)that our Constitution needs to install a “solution” to when elected representatives fails to represent their constituents’ wishes. Sure, there is the election but we need to resolve these misdeeds before they take effect. Besides, losing an election is a small price to pay for misbehavior of elected officials. I think the old tar and feather approach would work better!!!!!!!

  10. If minimum wage costs jobs…..

    What do minimum health benefits cost ??????

    A: more jobs
    B: your health
    C: both A and B

    BTW, Obama knows full well that midsize employers will drop insurance coverage and pay a $2000 fine/tax/lien/ per employee instead. This will push the system towards single payer.

    A big problem with Obamacare is the way it was framed by its supporters is totally disingenous to the actual goals.

    A bigger question is what will happen when the economy collapses even further and no one can afford health insurance?

    Will it then become single payer or will it go free-market?

  11. Jack says:


    Doesn’t it all make sense? This is Roosevelt economics. Raise prices to get incomes up and the economcy back to work! Some politicians have come along way. Isn’t it fortuitous that the administration could find low costs of health care to jack up, in order to put up wages and prosperity. And Bernanke and company are joining the march; what this country needs is more inflation!

    Uncertainty and weak economies bring out the kooks.

  12. Erik says:

    So we are to believe that teens were pushed out of the job market because of minimum wage regulations? Really? I know my gardener costs way more than minimum wage, and my morning paper is delivered by a guy in a truck. These are jobs adults do now because their jobs have been outsourced or eliminated in the pursuit of profit.

    McDonald’s should be embarrassed that they only give their hardworking profit generating staff a mini-med policy. Do you think the Executives are enrolled in that plan? McDonald’s has decided to place profit over hard working productive people, simple as that. They have one of the best performing stocks even during this downturn. They can more than afford to insure their employees with better plans, they simply choose not to. I would rather have Obamacare than McClowncare.

  13. Woody says:

    I don’t have to “imagine” that I am an employer. We are busy reshaping the way we go about things to avoid being in the cross-hairs of this monstrosity in 2014. We’re not alone.

    What rich irony that the crowd decrying outsourcing has done so much to promote outsourcing.

    By the way Erik, be careful what you wish for.

  14. Mike says:

    To me there seems little doubt that employers will drop coverage and pay the $2000 dollar fine. Personally, I think that this is a means to the single payer system and more dependence on the government.

  15. Mogden says:

    I think the explanation is that the politicians don’t understand economics, and to the extent that they do, they only care about avoiding devastating consequences before the next election. The election after that will have to take care of itself.

    A more cynical explanation is that they do understand economics, and realize that the long term pressures that result from the health care bill will result in larger government and more power for them and their cronies.

  16. Cordelia says:

    One dynamic that you have to keep in mind is that employers are legally required to offer equivalent coverage to all of their workers – high and low-wage. But for high-income employees who itemize, eliminating employer coverage and buying on the exchange means losing the tax deduction for health benefits: benefits purchased on the exchange are not deductible. Given marginal tax rates including FICA and state that range between 40 and 50+%, high-wage employees are better off with employer provided coverage. So there will be a real push to shift low-wage functions to subcontractors, rather than having them in-house. That way the subcontractor pays the $2000 per worker penalty, and the (primarily high-wage) employer continues to offer coverage. What this implies is a real two-tier market, with primarily low-wage workers in the Exchange. Under these conditions, it wouldn’t be surprising if the nature of coverage offered to these two groups differed. Since the benefits that must be covered, and the actuarial value of the benefits are specified, the primary way this would have to be done is by constraining choice of providers, heavily managing access to care and designing cost-sharing to decrease use. Probably, this means something like a Medicaid dynamic, with lower cost – but probably also lower quality care provided through the Exchange for those who cannot avoid this option.

  17. John Seater says:


    If you pay your gardener “way more than the minimum wage,” aren’t you just saying you consider him to be worth way more than the minimum wage? How is that relevant to unskilled and inexperienced teenagers? Why don’t you hire some of them to do your gardening?

    Do you believe a firm should pay a worker what he is worth or more than that? If the latter, why? Do you expect firms that follow such payment policies to stay in business? If so, how? How many people will they employ after they have gone out of business?

    Do you believe that non-unionized labor markets (which is most of them in the US) are competitive? If not, what evidence justifies your belief? If so, then isn’t McDonald’s paying its workers exactly what it *should* pay them? If not, why not?

    Do you believe that profit is bad? If so, how would you recommend repaying the owners of capital (buildings, machines) for foregoing consumption yesterday so that workers can have the wherewithal (buildings, machines) to make things today?

  18. Matthew Holt says:

    In John’s cloud cuckoo land he might be right, but in reality where the rest of us live unemployment has got virtually nothing to do with low income wage rates. Or did we really go from 1% unemployment in 1999 to 5% in 2003 to 10% now because of soaring minimum wage rates? Ridiculous, and not consistent with reality outside of dumb right wing economic text books (by the way my grandfather Freddie Benham wrote one)

    Equally dumb is the assertion that total cost of benefits + wages are constant. If that was the case then employers and unions wouldn’t fight over health benefits. Employers would pay higher benefits and let wages go down. Of course in reality that doesn’t happen, and the big employers who fund John’s “work” ignore his ideas and instead fight tooth and nail to reduce the overall share of revenue going to health benefits and wages. Why because they want to increase the share going to profits. Which have gone up dramatically over the last 30 years.

    Finally we have an exact historical case study–the introduction of the minimum wage in the UK in the late 1990s. Minimum wage was introduced–unemployment went down.

    In general, this whole thing is just more propaganda from John supporting his vague assertions that somehow the magical “free market” will correct the health care system. It’s just more tosh and while it’s amusing, and may match the garbage that passes for Chicago-style economic theory, it’s got nothing to do with reality.

  19. John H says:

    Minimum wage employees don’t get health care. They only get to work 29 hours a week so don’t quualify for health care which mostly requires 30 hours a week.

    The arguments in this article are really ridiculous. Do you really want a 15 year old kid being paid 3 dollars an hour causing a disturbance in the movie you are watching? Really, what kind of teenager is gonna be taking these jobs? I’ll take my gas tank w/o sugar please and just refill it myself and maybe buy a snickers and a couple lottery tickets inside the store…

  20. mattmc says:

    “Or can you think of another explanation for the ACA?”
    It’s an attempt to set up the system for failure so the government has to take over the whole thing. It seems to me to be designed to put all of the blame on private insurance carriers for the inevitable rate hikes. By making it hard for insurers to insure, and making it harder for employers to buy insurance, it is driving us towards a market where the regulations make it unprofitable to do anything with health care, leaving the government, which has no problem losing money and running deficits to take it all over.

    It’s a poison pill and industry was foolish to support this effort at all.

  21. Randy says:

    Two major problems – first ‘principle’ #2 that non-cash compensation substitutes dollar for dollar REALLY needs substantiation. A link. A study reference. An authority. ANYTHING other than a bland statement of a non-fact. No employer I’ve ever interacted with substitutes non-cash benefits for cash on a dollar for dollar basis. If this were the case, there would be a lot more negotiation for salary vs benefits. Contractors would make more than employees at the same company. (Counterfactual in my experience. Contracting is frequently used as an ‘audition’ to determine whether the company wants to hire an individual. Companies certainly don’t want to REDUCE someone’s salary if they make a decision to hire.) As a strong counterfactual to this argument, a logical prediction (assuming the rest of the article is factual) is that single employees … who cost less in benefit coverage … would make more CASH than married employees to substitute for benefits. They don’t. It’s well proven that there is a marriage premium in salaries. In addition, single employees subsidize benefit coverage for employees with families. (Just like they do in state and local taxes.)

    The second major problem this time from principle #1 that total employee compensation is equal to value of production at the margin is flat out wrong. Again, no company (that produces a profit) operates this way. The statement COMPLETELY ignores opportunity cost … the revenue that would be generated by an alternate investment. The decision to hire another employee or not is NOT based on whether that employee is going to generate revenue equivalent to the total compensation package. It’s based on whether the employee will generate revenue equal to the total compensation package inflated by the employer’s IRR … for the company I used to work for that value was 18%. So, the MINIMUM an employee had to contribute was 118% of the total compensation package. You can decide for yourself whether opportunity cost changes the ‘analysis’ or not.

    Let’s not criticize politicians for misunderstanding economics, if ‘experts’ aren’t quite understanding economics themselves.

  22. Erik says:

    I decided my gardener was charging too much while reducing his services so I fired him and now I do it myself and I am healthier and happier for it. If there was a teen who offered to do the job I absolutely would entertain it. But alas, video games have killed hard work for most teens.

    As far as union vs. non-union I will say that unions built this country to what it was in all its greatness. With the decline of unions we have seen the worker in this country demoralized, demonized, underpaid, and outsourced. Workers are what make a company successful or not. It is their work that creates the profits owners so dearly crave. Non-union employment favors corporations and contributes to a race to the bottom for blue collar wages (think illegal immigration). Who uses this labor? Corporations. How do they contribute to a race to the bottom? Lower wages (if paid), no benefits, displacement of legal workers union or not.

    Also, profit is great. It is why we work. It should also be proportionate to the contribution made. No CEO deserves 20x the salary of the labor required to make that profit. It should be distributed along a percentage that takes into account the sweat equity needed to produce that profit (salary + bonus structure). Henry Ford had it right.

  23. cyn says:

    I’m confused. If the law provides subsidies such that a low income employee will pay a max of 9.5% of their income towards health insurance, won’t the additional “cost of labor” added by the law be .095 * $7.25 = $0.69, not $5.89?

  24. John Goodman says:

    What Matt Holt calls “Chicago-style economic theory” right out of “right-wing economics textbooks” and what Randy finds so completely improbable is what economists call “micro-economics.” The concepts used in my post are actually uncontroversial and may be found in any mainstream intro-econ book or labor economics text.
    Here is David Cutler (you know him – the “right-wing” Harvard economist who helped put together Romney Care and Obama Care) with his explanation:

    See in particular the top of page 35.

  25. In a comment on Arnold Kling’s blog, you say that the employer has the option of not providing health insurance and instead paying a fine of “$1 an hour for full time employees”. So why do you say in your post that the law requires them to pay up to $5.89 for full time employees with families? Is this based on speculation about possible changes in the law?

    Wouldn’t it be more accurate to say that employers have the option, but not the obligation, to pay $5.89 (or more)? My understanding is that there is no employer mandate.

    Your post appears to be very misleading, but perhaps I’ve missed something. Please clarify.

  26. Matthew Holt says:

    Don’t worry John, I think most of the same stuff about Cutler. Full of nonsense about the added value of medical care in

    And economists as a whole are dismally wrong most of the time–especially those who espouse Adam Smith but leave out the parts they dont like

    On the other hand my grandfather (who sadly died before I was born) was apparently a great wit and very successful bridge player–2 traits he failed to pass on to me…he did though write a whole treatise on high increase in wages in iron workers in Australia in the 1920s lead to unemployment. Which I suspect meant that he missed the big picture like you do!

  27. Yaj Reizarb says:

    I love it! Someone who has *never* read *any* full work of Smith’s chiding someone who has for omitting key passages. Tell us, professor Holt, what are your favorite chapters and passages from “The Theory of Moral Sentiments”?!.

    It’s almost as good as a guy who uncritically accepts every single claim issued by the Dartmouth boys chiding economists for making erroneous claims based upon a misinterpretation of statistical aggregates.

    Stick around, Mathew – this should be fun!

  28. John Goodman says:

    Erik, the employer has the option. Think of it as play or pay. Provide “affordable insurance” or pay a fine. Intially that fine (less than $1 per hour)is well below the cost of indiviual ($2.28) or family ($5.89) coverage. But I think a lot of employers intuitively know that if they drop coverage on a grand scale, Congress will make the fines even stiffer.

  29. joe says:

    what a bunch of greed, ignorant freakin’ morons ya got commentatin’ here…I doubt any of you Repiggies has the brainpower it would take to make a reasoned, discerning comment about anything, it’s just OBAMACARE, BE AFRAID!!! ThaT’s all you REPIGS got is fear and loathing, and I do loathe you, so MISSION ACCOMPLISHED!!!

  30. Vicki says:

    Just when you are beginning to think we really don’t need so many mental institutions, someone like Joe comes along and shatters the illusion.

  31. John, Thanks for the clarification. I think it is misleading to say that employers are required to pay up to $5.89 per hour if they have the option of paying $1.00 per hour.

    It’s true that health care is very expensive in the U.S. and it must be paid for somehow. Of course, this was (even more) true before the ACA was passed. Perhaps in 4 years those costs will covered be via taxes, borrowing, individual mandates, employer mandates, health savings accounts, insurance premiums, cost controls or some mixture. Perhaps your speculation is correct that someday Congress will propose and pass an employer mandate requiring employers to pay $5.89 with no option of paying less.

    But it appears that that is not the case currently, in contrast to what your post leads readers to believe. in fact, I’m not aware of such a bill even being proposed, let alone likely to be passed. If anything, sentiment seems to be in the other direction.

    If you feel that the ACA is a bad idea, you should be able to make the case based on the actual law as, not what you imagine it might someday be. And if your argument is based on speculation, you should make that clear.

  32. Diane E. Merna says:


    According to industry standards today, employers do not have to pick up 50% of the tab for dependents. (This is pre-ACA. The new Health Care Reform bill will be changing this.)


  33. Microeconomics says:

    The claim that “the economic effects [of a health-insurance mandate] are the same, regardless of who writes the checks” is not at all uncontroversial nor can it be found in any mainstream intro-econ book or labor economics text.

    What basic microeconomics does indicate is that the economic effects of employment taxes are the same regardless of how they are split between employer and employee.

    But a mandatory purchase of health insurance is like a tax if and only if the employee values health insurance precisely $0. In that case, and in that case only, the $5.89 are a wedge between his cost to the employer and his real take-home pay.

    If we assume instead, as Cutler (1995), that “employees value health insurance at its cost to employers”, then there is no wedge whatsoever, and therefore the health-insurance mandate causes no labor market distortions at all.

    Take any worker earning $13.14 or more.

    If his valuation of health insurance is $0, the mandate will indeed make him work less (or possibly not at all), because he cannot work without having to waste money on health insurance he doesn’t value.

    If instead his valuation of health insurance is $5.89, his employment is unaffected by the mandate. He is indifferent between a wage of $13.14 with and no employer contribution to health insurance, a wage of $7.25 and health insurance fully paid by the employer, or any intermediate combination. The mandate makes no difference because this worker would gladly spend $5.89 on health insurance anyway.

    For workers earning a wage W < $13.14 these remain identically true if the share of the premium paid by the employer is no more than W – $7.25, so the employer can compensate by lowering the cash wage. In particular, the results also apply to minimum-wage workers so long as the cost of the mandated health-insurance is borne entirely by the employee.

    The labor-market distortions raised by the original post arise in connection to two problems only:

    1) Employers might be forced to pay some fraction of the mandatory premium. This, and not the mandate itself, would represent an increase in the minimum wage. The law does not seem to compel this, but I do not know it well.

    2) Employees might value health insurance at less than cost. Although they must value it more than $0, it is possible they value it less than $5.89. But I also do not know empirical studies of customer valuation of health insurance.

    Both (1) and (2) are reasonable topics of discussion, but they are much more nuanced than the exaggerated claims made in the original post. The latter are only consistent with basic microeconomics if health insurance is totally worthless to employees. I cannot imagine Dr. Goodman believes that.

  34. Devon Herrick says:

    I would argue that many workers do indeed value their employer plan at a rate lower than the true cost. The tax subsidy; and the incorrect assumption that employers bear most of the cost, is largely why workers want lavish health benefits. When individuals purchase their own health plan in the individual market, they tend to opt for higher deductible plans with less-comprehensive benefits.

  35. mike says:

    What a farce of an article. There is no employer mandate in this bill, so the new legislation does nothing to impact the wages that employers pay. You can still pay someone $7.25/hour with no benefits.

    Second, everyone simply assumes that because more people will be covered that it will cost more. This is incorrect. Everyone is already covered; anytime someone is ill they go to the ER and the taxpayer picks up the bill. This legislation makes the individual PAY FOR HIMSELF INSTEAD OF THE TAXPAYER DOING IT. It is the very definition of a conservative policy, and in fact was the preferred healthcare solution by the GOP and conservatives for the last 30 years, right up until they collectively lost their minds and began frothing at the mouth.

    I mean, earlier this year GOP Senators and Congressmen were tramping all over the country leading shouts of “Hands off our Medicare!”. When did the GOP become against cuts to Medicare?!?!?! They’ve been trying to do that for 30 years, and rightly so. Now because Obama joined their side they all went running to the liberal position. Ridiculous

  36. Stokey Wan says:

    The actual cost to the employer will go down because the incentives to drop coverage are created by the bill and the ability to buy insurance in the exchanges at subsidized rates will reduce the competitive disadvantage of companies that don’t offer health insurance. The trend will be to not offer insurance, thereby reducing costs on businesses and making individuals responsible for buying it themselves–a very conservative set of goals.

    Beyond that, it is important to note that a world where companies drop insurance coverage does not create a single payer system. The way the ACA is set up, even if employers drop coverage, the result is that individuals buy insurance in a competitive market from for-profit insurance companies. Dropping coverage doesn’t create single-payer, it corrects the decades-old distortion in the market we created when we provided tax deductions for employers to offer health insurance. The ACA doesn’t put us on the road to single-payer, it puts us on the road to Wyden-Bennett, a multi-payer system where health insurance is predominantly provided by for-profit companies.

  37. Gary says:

    The intent of Obama and the Democrats is to drive the insurance companies out of business and take over health care with federal bureaucrats in charge–at whatever cost it inflicts on everyone else. The reasoning behind this, obviously, is to make slaves out of all of us who must depend on their leadership (and so-called mercy) for our very survival as living organisms. Bottom line: They want nothing more than to be able to say, “The Republicans will take away your health insurance.” Meanwhile, each and every one of them in power will have what all of us have now–private health insurance with the ability to choose our own doctors. It will impose a two-tier system of haves and have nots on the nation, with 99 point something of us have nots.

  38. Donald Devine says:

    This is a really great piece.

  39. MarkusR says:

    If you think minimum wage is bad for the economy, then you should take a pay cut for the good of the economy.

    I certainly hope John C. Goodman doesn’t get paid over minimum wage, because what he produces is purely worthless.

  40. David says:

    Uh John, real wages have been stagnant for the past decade due to health-cost increases. What is the problem if they remain stagnant for a few years, while the quality of the healthcare insurance provided rises dramatically.

    Your articles get really old. They are all criticism without solutions. Healthcare reform may not have been perfect, but it is pushing failed markets toward real markets.

  41. Jim Luckett says:

    Some really great rebuttals here to the very flawed logic. The healthcare law says everyone who can afford it has to buy health insurance. You can’t go uninsured and expect the rest of us to take care of you when you get sick. If you can’t afford it, it provides subsidy so you can. Nothing about this will raise the cost of labor. This is about how people spend their money, not how much they get paid. Also: People can’t do without healthcare. It’s not like Ipods and bubble gum. We don’t let people die in the streets if they get sick or injured and can’t afford a doctor. So, we need a system to pay for the care that we are required to give each other. Mandatory insurance, with subsidy for those who can’t pay, makes sense. That, or if we actually wanted lower costs like Japan, UK, Taiwan, France, Canada, etc. have, single payer. If there is a 3rd choice, propose it! The current system of using the emergency rooms as free-care clinics and letting people get really sick before we treat them is not holding down the cost of labor nor of healthcare.

  42. DrJanetWilson says:

    “Granted, the law does not specify how much of the premium must be paid by the employer versus the employee — other than a government requirement that the employee’s share cannot exceed 9.5% of family income for low- and moderate-income workers and an industry rule of thumb that employers must pick up at least 50% of the tab. But the economic effects are the same, regardless of who writes the checks.”

    Yes, but since we can’t do anything about it. I would still prefer the corporation to take up the cost rather than charge more to employees.