November 28, 2008 4:28PM # Larry Summers on Employer Mandates By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) --- SHARE President-elect Barack Obama has [named](http://www.washingtonpost.com/wp-dyn/content/article/2008/11/23/AR2008112302487.html) former Treasury Secretary Larry Summers to head his National Economic Council. Obama also [wants](http://www.barackobama.com/pdf/issues/HealthCareFullPlan.pdf) to require employers to offer health insurance to their workers. It is therefore instructive to recall what the head of Obama’s National Economic Council has [written](http://www.jstor.org/stable/1827753) about employer mandates: > Economists have generally devoted little attention to mandated benefits- regarding them as simply disguised tax and expenditure measures. Uwe Reinhardt’s reaction is probably typical: “\[Just because\] the fiscal flows triggered by mandate would not flow directly through the public budgets does not detract from the measure’s status of a *bona fide* tax.” > > > Suppose, for example, that there is a binding minimum wage. In this case, wages cannot fall to offset employers’ cost of providing a mandated benefit, so it is likely to create unemployment.… > > > Mandated benefit programs can work against the interests of those who most require the benefit being offered… > > > If policymakers fail to recognize the costs of mandated benefits because they do not appear in the government budget, then mandated benefit programs could lead to excessive spending on social programs. There is no sense in which benefits become ‘free’ just because the government mandates that employers offer them to workers… > > > It can plausibly be argued that mandated benefits fuel the growth of government. ##### Related Tags [General](https://www.cato.org/general), [Health Care](https://www.cato.org/health-care), [Regulation](https://www.cato.org/regulatory-studies) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).