Do you believe everything your boss tells you? The answer probably depends—if he tells you the Cubs are going to win next year's World Series then maybe not, but if he tells you your benefits are being cut and explains the reason why, you'll probably take him at his word. After all, he's in charge of the business, so he should know.
But Tim Armstrong, the CEO of AOL (company motto: "More Than Just Your Grandmother's Email, Really!") must have thought his employees were pretty darn stupid when he told them last week that he was cutting their 401(k) contributions and blamed the change on the Affordable Care Act. He explained in an interview that the company had incurred $7 million in "Obamacare costs," whatever that's supposed to mean, and later complained that two employees who had "distressed babies" had cost the company $1 million each.
It's been said many times that once he passed significant health care reform, Barack Obama came to "own" the health care system, meaning he'd be blamed for every gripe anyone had about health care whether it had anything to do with his reform or not. And that is indeed happening. But it's not because of an instantaneous collective decision on the part of all Americans. It's because Tim Armstrong and thousands of other employers like him are doing everything they can to convince workers that their stagnant wages and shrinking benefits aren't the fault of the people who actually set those wages and benefits. This isn't just about who "owns" the health care system, it's about power and accountability in the workplace.
Armstrong happens to lead a high-profile company, and he quickly became the target of mockery and outrage over his move, since his explanation for the 401(k) cut was so plainly ridiculous. If by "Obamacare costs" he meant rising health premiums, well that's something you can't blame on the President. In fact, premiums have gone up every year since long before Barack Obama took office, and last year's increase for employer plans—4.8 percent for single coverage and 3.8 percent for family coverage, according to the Kaiser Family Foundation—was low by recent historical standards. And one presumes that if those two AOL employees had "distressed babies" five years ago, the company's insurance would have paid for their care, and that wouldn't have been Barack Obama's fault either.
Not only that, the $7 million in supposedly crippling health care costs that left the company no choice but to cut retirement benefits just happens to be exactly half of Armstrong's average yearly compensation of $14 million for the years 2009 to 2012. Needless to say, he didn't offer to take a pay cut to improve the bottom line—that kind of thing is for the common folk. But all the bad publicity took its toll, and by the weekend he reversed the decision. Given that the company just had its best earnings quarter in a decade, they can afford it.
But something similar is happening at companies all over America. Even though health insurance premiums have risen every year, this year management is saying, "Don't blame us—it's Obamacare." Laying off workers? Cutting benefits? Refusing to give raises? Don't worry about the employees getting mad. Just tell them it's Obamacare.
And most of the time, they'll have no way to know anything different. There won't be national news stories about it, and if the HR person tells them the company's hands are tied, they'll accept the explanation. The boss's escape from accountability is complete. An AP poll late last year found that 76 percent of people with employer-sponsored plans said that changes in those plans, like increased premiums and higher co-pays, were because of the Affordable Care Act. Almost all of them are wrong. So where could they have gotten that idea?
With so many people still looking for work, most employees aren't going to grumble, at least not to the boss. If you want to squeeze the people who work for you, conditions have never been better. You can blame your decisions on somebody else, and with unions virtually extinct in so many sectors of the private economy, workers have no way to bargain over benefits and salary. For millions of Americans, the negotiation is no negotiation at all. They sit quietly while they're told, "The job pays this much. These are the benefits. If you don't like it, there's another person in line behind you we can hire."
To his credit, President Obama has tried to convince businesses that they can make healthy profits and still treat their employees well. He has sung the praises of Costco (where the starting wage is $11.50 an hour and the average is $21 an hour) so many times you'd almost expect to find him there offering free samples of cocktail franks after his term is up.
But the occasional presidential speech is nothing compared to the messages people get on the job. And the message they're increasingly receiving is this: You'll take what we offer and like it. And if you don't like it, don't blame the boss. It's somebody else's fault.