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Here Come the Unintended Consequences of the Affordable Care Act and Right to Work

February 22, 2013
Labor and Employment Blog Post

Much talk has focused on the Right to Work and Affordable Care Act laws and their impact on employers. Seldom mentioned in all the buzz is the often more vexing impact of what seems to be a law of nature: the law of unintended, or from the employer's standpoint maybe unanticipated, consequences. This law seems to apply with a vengeance to government regulation of primarily economic behavior, perhaps because the operation of the free market in response to that regulation goes where it goes, regardless of legislative intent.

Employers plan for the consequences of new laws and so can be prepared to adjust to new requirements. They may also be ready for the "first wave" of unintended consequences commentaries have predicted, for example the prediction that many employers will opt out of providing health care directly to employees as a result of ACA (although there is a school of thought that perhaps this was not altogether an "unintended" consequence by those who might ultimately prefer a "single payor" system).

But what surprise effects will these new laws be the cause of?

I wish I knew. What happens to other voluntary employer- provided "fringe benefits" when the mother of all "fringe benefits" is no longer a matter of employer choice in the way it traditionally was, or if it isn't offered by the employer at all?  What happens when you tell a state full of compulsory union dues payers that they don't have to pay any more; or, said another way, what happens when unions enter a consumer-based, competitive free market?  Will the union that figures out how to give its customers value at a good price come out stronger?

Sometimes it takes years to discern these effects, and even then it's pretty hard to explain why things happen the way they do.

But lately I have been wondering if one generation's prohibition against mandatory retirement is a generation once removed's delayed entry into the job market, with all that entails. You never know.

So be prepared, I guess, the best you can be.

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