One of the first victims of the Great Recession was service. I don’t know about you, but with disturbing regularity I get seated in restaurants . . . and we sit there . . . waiting for someone to greet us, bring menus, ask if we want anything to drink . . . and we’re left waiting for a seemingly interminable time. It’s as if our waiter suddenly retired. Or, you know, it’s like we’re in Europe.
Peggy Noonan is noticing the same thing.
It’s not a debt and deficit crisis, it’s a jobs crisis. The debt and the deficit are part of it, part of the general fear that we’re on a long slide and can’t turn it around. The federal tax code is part of it — it’s a drag on everything, a killer of the spirit of guts and endeavor. Federal regulations are part of it. The administration’s inability to see the stunning and historic gift of the energy revolution is part of it.
But it’s a jobs crisis that’s the central thing. And you see it everywhere you look.
I’m in Pittsburgh, making my way to the airport hotel. The people movers are broken and we pull our bags along the dingy carpet. There’s an increasing sense in America now that the facades are intact but the machinery inside is broken.
The hotel has entrances on two floors. I search for the lobby, find it. Travelers are milling about, but there’s no information desk, no doorman, no bellman or concierge, just two harried-looking workers at a front desk on the second level. The man who checked me in put his phones on hold when I asked for someone to accompany me upstairs . . .
Things are getting pretty bare-bones in America. Doormen, security, bellmen, people working the floor — that’s maybe a dozen jobs that should have been filled, at one little hotel on one day in one town. Everyone’s keeping costs down, not hiring.
What that hotel looked like is America without its muscle, its efficiency, its old confidence.
There are a lot of reasons for this . . . but we’ve added one more reason for a company to try to hobble along with fewer workers than they normally would:
Under ObamaCare, employers with 50 or more full-time workers must provide health insurance for all their workers, paying at least 65% of the cost of a family policy or 85% of the cost of an individual plan. Moreover, the insurance must meet the federal government’s requirements in terms of what benefits are included, meaning that many businesses that offer insurance to their workers today will have to change to new, more expensive plans.
ObamaCare’s rules make expansion expensive, particularly for the 500,000 US businesses that have fewer than 100 employees.
Suppose that a firm with 49 employees does not provide health benefits. Hiring one more worker will trigger the mandate. The company would now have to provide insurance coverage to all 50 workers or pay a tax penalty.
. . . Under the circumstances, how likely is the company to hire that 50th worker? Or, if a company already has 50 workers, isn’t the company likely to lay off one employee? Or cut hours and make some employees part time, thus getting under the 50 employee cap? Indeed, a study by Mercer found that 18% of companies were likely to do exactly that. It’s worth noting that in France, another country where numerous government regulations kick in at 50 workers, there are 1,500 companies with 48 employees and 1,600 with 49 employees, but just 660 with 50 and only 500 with 51.
If service industries cut the staff any deeper, it’s going to start looking like the sets of The Walking Dead in this country.