Examples of rational actors

Hidden Cost of the ACA

The following memorandum illustrates one of the hidden costs of the Patient Protection and Affordability Care Act, aka PPACA, ACA, or ObamaCare. The Senior Vice President and Chief Operating Officer at Virginia Commonwealth University sent it to me because I employ hourly workers in my role as Chairman of the Department of Economics. The gist is that hourly workers must not work more than 29 hours per week. The incentive for the policy is that the ACA requires employers to provide health insurance to employees who work 30 hours per week or more. Thus, any hourly worker who used to work 35 hours per week will see their hours cut by at least 6. I doubt that the folks who passed the ACA wanted to reduce the hours worked by part-time hourly employees.

Here is the memo.

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To Vice Presidents, Vice Provosts, Deans, Directors and Department Heads:

We have received guidance from the Governor's Office regarding an amendment to the Commonwealth of Virginia's Manpower Control Program and the anticipated impact of the federal Patient Protection and Affordable Care Act (the Act) on state agencies, specifically wage (hourly) employees.  The amendment mandates that wage (hourly) employees not work more than 29 hours a week on average over a 12-month period.  This action is needed now to mitigate the potential financial impact of the Act on the Commonwealth, which takes effect January 2014.

Cabinet Secretaries will report quarterly to the Governor the number of new wage (hourly) employees hired within their secretariat by agency.  This information will determine which wage (hourly) employees meet the definition of "full time" (i.e., employees who work 30 hours or more a week to be eligible for health benefits under the Act) as based on a retroactive baseline measurement period the Commonwealth must presume at this time began January 1, 2013.  Please note that violations of the Act carry ongoing penalties assessed for impacted individual employees and may be significant.  Budget language specifies that agencies are accountable for compliance and are responsible for all costs related to violations of the Act.

What does this mean for VCU?  Effective immediately, the university is adopting a prudent staffing approach, as recommended, and is implementing wage (hourly) employment restrictions.  Specifically, supervisors must immediately inform their current wage (hourly) employees that they must not work more than 29 hours a week on average over a 12-month period.  Human Resources is working with your personnel administrators on communicating this information to supervisors, timekeepers and hiring managers.  I appreciate your support for and strong encouragement of these compliance measures in the university's daily business operations.  For more information, attached are frequently asked questions (FAQs).  Please provide these FAQs to your supervisors, faculty and staff.  You can also link to the FAQs at http://www.hr.vcu.edu/pdf_docs/FAQs_29HourRule.pdf. 

This opinion argues that government policies contribute to low employment rates for low income groups by creating high effective marginal tax rates.

Phil Mickelson stated that he has changed his behavior in response to recent increases in taxes and promised more "drastic" changes. 

Is Voting Rational?

In this article George Will examines why voter turnout has declined. The money statements are: "Because the likelihood of any individual’s vote mattering is infinitesimal and because the effort required to be an informed voter can be substantial, ignorance and abstention are rational, unless voting is cathartic or otherwise satisfying." He continues by stating that people inclined not to vote will tend not to register to vote unless the cost of registering is zero or negative (a fine?). 

http://online.wsj.com/article/SB10001424127887323894704578113120622763136.html is an interesting article on the effects of a "fat"tax in Denmark.