The new health care law will make it far harder for the restaurant and retail sectors, the primary employers of part-time and low-skill workers, to operate.
Firms with more than 50 workers will have to offer the right kind of health insurance, costing no more than 9.5% of the employee’s income, or pay a $2,000 penalty.
This will give small restaurants and stores a substantial cost advantage. It will wreak havoc with franchisees, who frequently own groups of small establishments.
(From a GLGroup.com article) In 2009, 50% of restaurant employees and 36% of retail employees worked part-time, i.e. under 35 hours per week. A higher percentage of women, 58% in the restaurant industry and 44% in the retail industry, work part-time.
With higher-skill jobs, employers can offer the required benefits and pay for them by cutting the wage. But low-wage jobs in the restaurant and retail sectors leave little room for cuts in wages.
So firms will have an incentive to become more automated, or machinery-intensive—and hire fewer workers. Fast food restaurants could ship in more food and have it reheated, rather than cooking it on the premises. Department stores could have fewer sales clerks and more price-scanning stations, so that shoppers could scan labels for prices rather than asking sales assistants.