New US labor laws could increase unemployment by 10% over next five years
Consumers who depend on insurance coverage to pay for medical and dental care, travel and other essential needs may be pushed to the brink by new US labor regulations, a major insurer said on Monday.
The Trump administration has proposed cutting the number of hours workers are required to work each day to 45, a move that would mean a 5% increase in the number who would need to work for health insurance, said John Bercovici, president of the National Federation of Independent Business.
The U.S. Department of Labor said Monday it would be reviewing a proposal to expand insurance coverage that would let workers make up the difference between a worker’s regular wages and the costs of medical and other expenses.
“In an era of global economic uncertainty, this proposal is another reason to be cautious about the impact of these new rules,” said Richard Freeman, chief economist at the National Employment Law Project.
Bercoviciso said that if Congress passed the law, it would force many Americans to work more hours for insurance coverage, forcing them to buy coverage at higher prices and force the employers to raise wages to cover those costs.
He said that could increase the number that would be unemployed, potentially increasing the unemployment rate by 10%.
Bercoviisi said the cost of insurance coverage could push many Americans into poverty.
The average monthly cost of health insurance coverage is $2,000, according to an analysis by Kaiser Family Foundation, which uses data from the Federal Trade Commission.
In an effort to help keep prices affordable for consumers, the Trump administration in May put the minimum wage on hold.
The measure would have pushed workers below the federal poverty level, where the average person would earn $15,400 a year.
That would make it harder for many workers to afford insurance.
The new proposal would raise the minimum hourly wage to $15 by 2019 and $15.50 by 2022, Bercovii said.
The Trump administration plans to announce the rate increase in a speech next week.
“We think it’s an irresponsible proposal and it would make the health insurance market more expensive,” Bercovskii said in an interview.
The labor department’s analysis of the proposal said it would lead to an increase in unemployment for workers in their 30s, who earn about $22,000 a year and make about $17,000 annually, or more than half of what they would make if they stayed on their current jobs.
Berkowitz said that while many people would be impacted, most Americans would not be.
He predicted that workers would be forced to make sacrifices in order to make up for lower wages.
“This is going to hurt some people and it’s going to be a lot of work for a lot more people, and so we’re not sure that it’s a great solution,” he said.
The proposal comes after a recent study by the Federal Reserve found that people who rely on health insurance to pay bills, buy necessities and find affordable jobs would be hardest hit by the proposed changes.
It said the legislation would increase the cost for people who were previously insured and would force them to pay more for the same amount of coverage.
The Fed said the bill would cost the U.P. economy $10.7 trillion by 2026, as insurance companies would have to raise premiums by 15%.
The Labor Department said the health care legislation would not directly affect insurance plans, but that many insurance companies have expressed concerns that they could see their business fall by about a third if it passed.
The White House did not immediately respond to a request for comment.