Unhealthy for economy

July 24, 2013 

I spoke with a man who owns a sawmill in St. Charles County, Mo. With the housing market being soft, his business has been down for the last several years.

But with the new rules about company-provided health insurance, he will have to make changes to maintain the same amount of bottom-line profit for him and his family.

He explained his situation to me. It is a fourth generation business and employs about 60 people.

He and his accountant have been doing the math, taking into account the new rules that will go into effect that were recently postponed until 2014. They have been comparing the present staff, payroll, costs of employee benefits, production, revenues and profits to what combination will provide the same profit after the Obamacare rules go into effect.

They have determined that with the lower payroll the amount of production from 10 less people will provide less revenue but the same profit when the added costs are deducted from those revenues.

So 10 people will have to go eventually but they get to keep their jobs for now.

Sawmill jobs are somewhat skilled labor and pay a little better than the other available jobs in the area of St. Charles County they are located in.

I wonder how supportive of the Obamacare program those 10 workers are right now.

I wonder how many stories like this we will hear in the future.

Low margin service businesses like restaurants will be hit the hardest.

Brad Sewell

Collinsville

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