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Obamacare's Silver Lining

Wherein we finally find something to like about Obamacare!

By Hobbes  |  June 6, 2016

For six years now, we, along with most conservatives, have inveighed against Obamacare and all its works.  It has increased health care costs for everyone; it has reduced choice; it has, of course, resulted in ever-greater tax expenditures, it's increased dependency on government; and it has created trainwreck collisions between government overreach and essential liberties like freedom of religion.

So it is with surprise that we can bring to you a unicorn: yes, there is in fact one good effect of Obamacare!  To understand it, let's take a quick glance at the history of fast-food employment.

The Ghost of Burgers Past

Almost from its inception in the early 1950s, the modern fast-food industry operated along fairly clear-cut economic lines.

There was a franchise owner, who purchased the rights to operate a restaurant and ponied up the cash to build it.  He was naturally fairly wealthy, and the profits generated by the restaurant generally compensated him pretty well, especially if he had three or four locations in the same general area.

Sometimes the franchise owner would double as the store manager, but more commonly the manager was a full-time hired employee with experience in the foodservice industry.  This was hardly an upper-class job, but the income and benefits had to be appropriate for a lower-middle-class income in order to attract people with sufficient skills.  Usually there'd be several such professional managers to cover all the hours the restaurant was open.

And there was everybody else, the vast majority of whom were part-time teenagers.  Until recent decades, the classical McDonald's dining experience almost always involved a pimply-faced kid who had no intention of flipping fries as a career; the other fast-food chains, and hundreds of smaller regional and local grease purveyors followed the same model.

As a result, for some decades working in a fast-food restaurant was an unofficial rite of passage for American adolescents.  It was said that as many as a third of Americans had worked at McD's alone at one time or another; even today, 1 in 8 Americans have.

Having middle-class teenagers as your frontline employees brings a certain amount of grief - hormonal dramas, laziness, and irresponsibility to name but three.  But it offered compensations too - they all spoke good English, and most of them had some rudimentary training in politeness, and some of them could even make change.

In the 1990s, though, the face of McDonald's and its peers changed.  Managers discovered that immigrants both legal and illegal were more reliable and harder-working than native teens and they cost less.  Particularly in urban areas, it became hard to find an American teenager at the front counter, Chick-fil-A being a notable exception.

What's more, these poverty-fleeing immigrants didn't usually have to squeeze in work hours between school, dates, and family vacations.  They were happy to work all the hours they could get and the paperwork of managing four full-timers is half that of eight part-timers.  The business case was compelling: the teenagers had to go.  As a result, teen unemployment skyrocketed.

And then... came Obamacare!

It's Papa Who Pays

We are all familiar with Obamacare's famous mandate: that every American must buy health insurance, and every employer must provide it or pay a hefty fine.

There is a loophole: Obamacare only requires health insurance for full-time employees, defined as working more than 30 hours a week.

The plain economic truth is that no entry-level fast-food job could possibly justify the expense of health insurance that meets Mr. Obama's standards.  With government subsidies, the very cheapest Obamacare plan (that doesn't really actually cover anything that's likely to happen) is around $40 per week.  That's four hours of pay at average fast-food wages, which would be 10% cost increase over full-time pay for no benefit to the employer.

The solution was obvious: cut all the bottom-tier employees to part-time status to avoid the needless health-care expense.  The evidence is clear; that's what they did.  Today, a low-skill adult who can only obtain a fast-food job probably needs to work for two different ones in order to get close to a full-time workweek, with all the associated stresses and expense.

It turns out, though, that there is another loophole to Obamacare, which brings us to our silver lining.

Obamacare does not actually require employers to purchase health insurance for all employees, even full-time ones.  It simply requires that the employer pay if the employees don't have insurance.

There are a lot of people who already have health insurance.  Most middle-class and professional jobs provide subsidized whole-family health insurance, as does the military.  Right off the bat, a lot of legally married spouses don't need or want fast-food-style health insurance because they're all set via their significant other.

And neither do their kids - right up to age 26!  All of a sudden, middle-class American teenagers have a marked cost advantage over immigrants legal and illegal - they can work full-time without the extra cost of health insurance.

So what do we see at our local drive-through windows?  Sure enough, once again the acne brigade is on duty as in times gone by.  And, wonder of wonders, it's possible to place an order with some hope of them actually getting it right since they speak the language!

Does this pleasant improvement make Obamacare worthwhile?  Of course not - we'd strike down Obamacare in a minute if we could and put up with the resulting staffing changes.

But nonetheless - sure enough, there's a single, solitary Obamacare silver lining!  And we thought there weren't any at all.