| Is Obamacare Responsible for the Surge in Part-Time Jobs? What About Obama's Defense Layoff Suspensions? Posted: 09 Oct 2012 11:47 AM PDT Following the surprise drop in the unemployment rate last Friday, I have seen many conspiracy charges leveled against the BLS. I do not believe any of the conspiracy charges. Had Obama instructed the BLS to juice the numbers, someone in the BLS would surely be yapping. They are not all Democrats. Many were hired under President Bush. Is Obamacare Responsible for Surge in Part-Time Jobs? Some stated the 582,000 surge in part-time workers was a seasonal thing based on teachers going back to work. I do not buy that explanation either because the surge in part-time workers and the decline in the unemployment rate were seasonally adjusted. One likely explanation is an outlier and the data will be revised lower soon enough (or the previous month's of weakness up). There is a second possible explanation although the timing as to precisely when it would matter is uncertain. Please consider Staffing Companies: How to Profit from Obamacare's Job Outsourcing. Obamacare is so huge and transformative, its effects will be felt far beyond just the healthcare sector; its tentacles of government control and penal taxes will permeate and affect the entire U.S. economy.
According to the Heritage Foundation – a Washington think tank – Obamacare's employer mandate will increase the cost of employing a single minimum-wage employee by $3,588 per year. The employer burden is even greater for minimum-wage employees with a family; in that case, the extra cost will be $11,026 per year.
You might think that one way around this problem would be for employers to offer unskilled workers cheaper health insurance with higher deductibles. Think again. Obamacare has a non-discrimination provision that says that if an employer offers health insurance, all full-time employees must be offered the same "minimum essential benefits" and at a cost that is no higher than 9.5% of the employee's household income. Bottom line: there is no escape for employers of full-time workers.
The only solution is for employers to eliminate full-time employment positions for unskilled workers earning near minimum wage. Since businesses need unskilled workers for certain functions, employers will only offer temporary and part-time positions to these poor workers because temporary and part-time jobs are exempted from Obamacare's employer mandate provisions.
Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor and now a Senior Fellow at the Manhattan Institute, came to a similar conclusion:
If an employer offers insurance, but an employee qualifies for subsidies under the new health care exchanges because the insurance premium exceeds 9.5 percent of his income, his employer must pay $3,000 per worker. This combination of penalties gives businesses a powerful incentive to downsize, replace full-time employees with part-timers, and contract out work to other firms or individuals.
Businesses can reduce costs by hiring part-time workers instead of full-time workers. A firm with 85,000 full-time workers and 7,000 part-time workers that does not offer health insurance would pay a tax of $170 million. By keeping the number of hours worked the same, and gradually reducing full-time workers and increasing part-time workers, until the firm reaches 17,000 full-time workers and 92,000 part-time workers, the tax is reduced to $34 million. If the firm abandons full-time workers altogether, admittedly an unlikely option, but useful for illustration, the tax is reduced to zero. What About Obama's Defense Layoff Suspensions? Diana Furchtgott-Roth writing for Real Clear Markets notes Obama Asks Big Business to Break the Law. The White House has initiated an effort, possibly extra-legal, to head off required layoff notices to employees of defense contractors on the cusp of Election Day. Worse, without congressional approval, it has offered to pay firms' penalties and court costs, potentially $500 million or more, out of the Pentagon budget.
Layoff notices are required by November 1, according to the 1988 Workers Adjustment and Notification Act (WARN),because deep cuts in military spending, known as sequestration, are currently scheduled to take effect on January 1. If cuts occur, they will lead to mass layoffs.
The Obama administration is concerned that layoff notices could cost the Obama-Biden ticket votes, especially in Ohio and Virginia, swing states with a strong defense presence.
It is the first time in history that the White House has asked firms not to file layoff notices.
In a memorandum dated September 28, the White House Office of Management and Budget counseled defense employers not to issue layoff notices on November 1.
OMB assured employers that if they did not send out layoff notices and layoffs occurred, the "contracting agency," namely the Pentagon, would absorb the penalties and attorneys' fees the employers would have to pay, a significant cost to taxpayers.
If firms don't file WARN notices and plant closings or layoffs of more than 500 workers occur, employers are liable for penalties of 60 days back pay and benefits paid to workers.
No problem, says OMB in the memo, the contracting agency will pay the costs. It specified that if sequestration occurs and the contractor has followed Labor Department guidelines, "any resulting employee compensation costs for WARN Act liability as determined by a court, as well as attorneys' fees and other litigation costs (irrespective of litigation outcome), would qualify as allowable costs and be covered by the contracting agency, if reasonable and allowable."
It's not clear that the White House has the authority to offer to pay the costs.
Nevertheless, defense companies, such as Lockheed Martin and Boeing, which were planning to send out notices to tens of thousands of workers, have announced that they will refrain. Blatant Manipulation This is clear manipulation by president Obama. That said, it would not affect the unemployment rate now. Nor is it a conspiracy. However, it was a cowardly act, one that certainly cannot inspire confidence in the president at all. For more on the jobs situation, participation rate, and controversy regarding the surprising drop in the unemployment rate, please see ... Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com "Wine Country" Economic Conference Hosted By Mish Click on Image to Learn More  
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| Hostile Reception For Merkel in Greece; Anti-Fascist Protesters Claim 'Tortured by Police' Following Golden Dawn Clash; Radicalism Takes Hold Posted: 09 Oct 2012 09:16 AM PDT I am not sure what German Chancellor Angela Merkel expected to accomplish in Greece, but whatever it was, it does not seem to have worked. The Financial Times reports on the Hostile reception for Merkel in Athens Angela Merkel flew in to a hostile reception from angry Greeks on Tuesday as security forces took tough measures to restrict or eliminate protests in central Athens, firing tear gas at demonstrators who tried to break through a police barrier.
Ms Merkel was given the red carpet treatment and full military honours at Athens airport. But on the streets it was a different matter, with more than 7,000 police officers deployed to keep demonstrators away from the German leader.
Sections of the capital were cordoned off and public gatherings in certain areas, including outside the German embassy, were banned.
Thousands of Greeks gathered in Syntagma Square in central Athens as Ms Merkel arrived. The demonstration – while vocal – was mostly peaceful but the mood was angry.
Giant banners declared: "Angela, you are not welcome," and "Out with the Fourth Reich". One caricature showed the chancellor in a swastika armband, being kicked from behind by Karagiozis, a Greek puppet representing the country's impoverished past.
Public sector unionists holding their second demonstration against the visit in as many days voiced resentment of what many Greeks see as excessive austerity policies imposed by Germany.
"She [Ms Merkel] came to tell us that we have to swallow more measures . . . It's unacceptable, she has no idea at all what Greeks are going through," said Lakis Papazoglou, a former local government worker unemployed since his contract ended this year. "She has no idea at all what Greeks are going through"
A jeep carrying men dressed in full Nazi regalia, and giving the familiar salute, drew huge cheers when it rolled down Stadiou Street towards the main square.
Alexis Tsipras, leader of the radical leftwing Syriza coalition, the main parliamentary opposition, spoke to the defiant mood in Syntagma Square, saying: "The democratic tradition of Europe won't allow a European people, the Greeks, to become a guinea pig [for harsh reforms] and a giant graveyard." Anti-Fascist Protesters 'Tortured by Police' Meanwhile Greek anti-fascist protesters 'tortured by police' after Golden Dawn clash. Fifteen anti-fascist protesters arrested in Athens during a clash with supporters of the neo-Nazi party Golden Dawn have said they were tortured in the Attica General Police Directorate (GADA) – the Athens equivalent of Scotland Yard – and subjected to what their lawyer describes as an Abu Ghraib-style humiliation.
Members of a second group of 25 who were arrested after demonstrating in support of their fellow anti-fascists the next day said they were beaten and made to strip naked and bend over in front of officers and other protesters inside the same police station.
Some said they were burned on the arms with a cigarette lighter, and they said police officers videoed them on their mobile phones and threatened to post the pictures on the internet and give their home addresses to Golden Dawn, which has a track record of political violence.
One man with a bleeding head wound and a broken arm that he said had been sustained during his arrest alleged the police continued to beat him in GADA and refused him medical treatment until the next morning. Another said the police forced his legs apart and kicked him in the testicles during the arrest.
In response to the allegations, Christos Manouras, press spokesman for the Hellenic police, said: "There was no use of force by police officers against anyone in GADA. The Greek police examine and investigate in depth every single report regarding the use of violence by police officers; if there are any responsibilities arising, the police take the imposed disciplinary action against the officers responsible. There is no doubt that the Greek police always respect human rights and don't use violence." Rise of Neo-Nazis I do not know how widespread police support is for Golden Dawn. However, the Greek government is very concerned as noted in Greek State Tries to Stem Neo-Nazi Rise. Stopping the rise of the neo-Nazis is going to be very difficult if there is widespread police support for Golden Dawn. Radicalism Takes Hold One thing is for sure, five years of economic depression is driving Greek citizens away from the center towards radical left and radical right parties. Those parties have one thing in common, they want to default on Greek debt. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com 
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