Minimum Wage and Medical Insurance

Question of the Day: If Virginia enacts a minimum wage increase, how many employers will respond by cutting fringe benefits like medical insurance?

Kennon Morris, president of the Virginia Forest Products Association, raises the concern in a Free Lance-Star op-ed today. Here’s his prediction of what would happen in rural Virginia: The minimum wage “would force many businesses to shut down, cut jobs, or hire part-time workers without benefits.”

Foes of the minimum-wage hike have focused mainly on the impact on jobs. But employers may choose other ways to control costs. One possibility is scrapping company-subsidized health plans — encouraging employees enroll in Medicaid or buy Obamacare. I would love to see an analysis of how many workers potentially would be affected and what the fiscal impact on state and federal government would be if thousands suddenly became medical wards of the state.

— JAB