America, 2014: The Land of Entitlements

I run an employee benefits company that focuses on helping small business owners with medical and other health benefit plans for their employees.

Earlier this week I had lunch with a CPA client of mine to talk with him about increasing the number of his small business clients who provide medical insurance plans to their employees.  Everything I recount herein is from him; I am not making this up.

His answer and the reasoning behind his answer were stunning to me.  In my naivety, I hadn’t even dreamed that I would hear anything like what he was about to tell me.

He explained that essentially, his clientele comprises Spanish-speaking business owners, almost all of whom employ essentially 100% Spanish speaking workers.  They own firms such as restaurants, gardening services, custodial services, small grocery stores, painting companies, trucking companies, and so on.  But, he said, most of their employees who work only 20 to 30 hours a week, with only a very few who work the full traditional “full time” 40 hours a week.  As a result, my CPA client said, nearly all of his clients, the business owners, don’t feel an obligation to provide benefits to these “part-time” employees.

When I asked why they had mostly part-timers instead of full-time workers, he explained that the employees don’t want to earn too much money, or else they’ll lose their government benefits.

They like getting free things like food stamps, a housing allowance, MediCal insurance (California’s government subsidize medical care for low income people), and the like.  They would rather earn less and get the entitlement programs for free than work longer hours, make more money, and have to pay for their own food, housing, insurance, and so on.