Funding plan worker health care access falls hardest on small
businesses, City Controller reports
Neutral impact on overall economy
June 24, 2006
San Francisco businesses with 20 to 99 employees would be impacted
most by the proposed Worker Health Care Security Act, City Controller
Ed Harrington reported yesterday.
"If implemented, this ordinance will have benefits and costs
both of which could grow significantly over time," concluded
Harrington's Economic Impact Report.
"While overall the ordinance appears to be economically
beneficial, some employers will be adversely impacted (and may
even close) and some people that work for firms that cannot afford
coverage will lose their jobs," continued the report conclusion.
"Our economic impact analysis projects that an estimated
14,070 to 19,570 people could gain increased access to health
care benefits at an estimated projected cost of $30.9 to $49.0
million in the first year of coverage.
"These costs will be immediately felt by employers and predominantly
by smaller employers with less than 50 employees, as they currently
are less likely to offer health benefits to their employees.
"Over time, however, we project that employees will ultimately
pay a portion if not all of the cost of these new benefits through
otherwise lower wage increases, as employers operating in a competitive
marketplace have only so much resource capacity to pay toward
personnel compensation costs (including both wages and fringe
"In the short-run, we project that for some businesses the
increased cost of doing business in San Francisco will be greater
than is supportable through price increases or existing profit
margins, resulting in estimated losses of between 60 and 590 jobs.
On the other hand, between 150 to 240 healthcare jobs could be
created if all costs represent increased consumption of health
services within San Francisco."
For complete report, click