Tuesday, March 11, 2014

How the Affordable Care Act hurts lower income people

According to a new report by Unite Here, a union that represents employees in the hotel, food service and gaming industries, Obamacare is going to cost low-wage workers more than higher income people.

“If employers follow the incentives in the law, they will push families onto the exchanges to buy coverage,” the report, which was posted on Ralston Reports, states. “This will force low-wage service industry employees to spend $2.00, $3.00 or even $5.00 an hour of their pay to buy similar coverage.”

The report also pointed out that workers could face reduced workloads as a result of Obamacare, stating that “388 employers [have] announced hours cuts since early 2012.”

The organization cited a Brookings Institution study to make the point that Obamacare would increase income inequality: "People in the bottom two-tenths of the income distribution would see average gains of 5.3 percent and 7.2 percent from the ACA," the Brookings Institution states. "Families in the next lowest 20 percent (family income $20,000 to $38,000) would suffer significant income declines to achieve these gains. Meanwhile, the top ten percent would give up the smallest percentage of income. Only in Washington could asking the bottom of the middle class to finance health care for the poorest families be seen as reducing inequality."

To supporters of Obamacare who say the law will help the poor, how does people's hours getting cut help anyone?

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