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People stand for the Pledge of Allegiance at the Tea Party Patriots  People stand for the Pledge of Allegiance at the Tea Party Patriots 'Exempt America from Obamacare' rally on the west lawn of the U.S. Capitol in Washington, September 10, 2013. REUTERS/Jonathan Ernst (UNITED STATES - Tags: POLITICS HEALTH CIVIL UNREST) - RTX13G4G  

UH OH: Usually reliable Obama allies now say Obamacare is growing ‘income inequality’

Is Obamacare creating a rift between the White House and its supporters in organized labor?

Unite Here, a labor union representing 300,000 workers, has released a report warning that Obamacare will exacerbate income inequality and make health care less affordable for most Americans.

One of the adverse consequences of Obamacare, says Unite Here, is the growing trend of employers dropping workers’ hours in order to avoid providing costly health-care plans.

Citing polling commissioned by the U.S. Chamber of Commerce and the International Franchise Association, the group challenged claims made by the law’s supporters who say that Obamacare will not compel employers to drop coverage.

The joint survey found that, “nearly a third of U.S. franchise businesses have already cut workers’ hours, and more than a quarter of franchisers have replaced full time with part time workers. A majority of businesses close to the 50-worker employer mandate threshold said they planned personnel moves to stay below 50 full time workers.”

Additionally, says Unite Here, individuals who unwillingly become part-time employees will have no option but to pay more for a plan comparable to the one they once had under their employer.

The report reads, “If employers follow the incentives in the law, they will push families onto the exchanges to buy coverage. This will force low-wage service industry employees to spend $2.00, $3.00 or even $5.00 an hour of their pay to buy similar coverage.”

Unite Here says that despite the Obama administration’s promise to help workers, Obamacare will actually leave them with worse care and less annual income. The report estimated that in 2015, “Dropped employees, being pushed onto the exchanges will mean a major loss of income or health benefits. Families moving to the exchanges may lose between 4% and 25% of income to maintain equivalent benefits.”

The labor group went on to criticize the Obama administration for touting its support of working-class America.

Unite Here cited a study conducted by the Brookings Institute, outlining how Obamacare would widen the gap between rich and poor.

According to the Brookings study, individuals in the bottom two-tenths of American income distribution would benefit slightly from the health-care law. The very bottom income bracket of that distribution would see a  7.2 percent gain and the next lowest bracket would experience a 5.3 percent income gain.

However, people in the bracket that represents the next lowest 20 percent (families with an income of $20,000 to $30,000) would suffer significant income declines as a result of the law.

At the same time, says the Brookings report, the top ten percent would give up the smallest percentage of income.

“Only in Washington could asking the bottom of the middle class to finance health care for the poorest families be seen as reducing inequality,” wrote Unite Here.

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