Share

Policy: Economy

Obamacare implicated in sharp shift from full-time to part-time work

By |
White House,Obamacare,Jobs,Health Care,PennAve,Joseph Lawler,Economy

As Obamacare nears full implementation, critics are closely watching the mix of part-time and full-time employment for signs that the health care overhaul will result in workers’ hours being cut.

Conservatives blame the Affordable Care Act for generating part-time jobs instead of full-time ones because of a provision that penalizes employers that do not offer health insurance to full-time workers, defined as those working at least 30 hours a week. In theory, the employer mandate could prompt businesses to shift to part-time labor.

There have been a number of anecdotes stoking those fears. A number of businesses, schools and governments have announced that they will hire only part-time workers or reduce the hours of full-timers to avoid paying the penalties imposed by the law.

And some analysts, such as Moody’s Mark Zandi and the Mercatus Center’s Keith Hall, have suggested that the law’s effects can be seen in recent jobs data, after a few months of high part-time job creation.

According to Hall, 70 percent of the jobs created in 2013 have been part time.

Data relating to part-time employment, however, can be volatile, and it’s hard to identify the influence of any particular factor.

A chart of the number of laborers who work part time and those who work part time for economic reasons shows no clear trends relating to the passage or implementation of the health care law.

Graphic: The blue line shows the number of people who are employed who usually work part time; the red line represents people who work part time for economic reasons.

Supporters of the law point out that other indicators show no evidence of a shift from full-time to part-time work. Jared Bernstein and Paul Van de Water of the left-leaning Center on Budget and Policy Priorities noted in Politico Tuesday that part-time jobs as a percentage of overall jobs is slowly declining, and the length of the average workweek has increased to its pre-recession level.

One writer, however, thinks he has found clearer proof that Obamacare is indeed causing a shift to part-time labor.

The Investor’s Business Daily’s Jed Graham delved into the jobs data released by the Bureau of Labor Statistics and found a sharp decrease in the number of workers working 30-34 hours a week and a similarly steep increase in the number working 25-29 hours.

“In the second quarter, the number of workers putting in 30 to 34 hours at their primary job fell by a monthly average of 146,500, or 1.4 percent, from a year earlier,” Graham wrote. “By comparison, the number working 25-29 hours per week in their primary job rose by 119,000, or 2.7 percent.”

That disparity, Graham suggests, can be chalked up to Obamacare’s definition of a full-time employee as someone who works 30 hours a week.

The stark difference in the fates of workers putting in 29 and those working 30 hours wouldn’t be picked up in the usual jobs data, because the BLS, which publishes the monthly jobs report, defines full-time work as 35 hours a week.

Graham concluded: “the data do suggest Obamacare’s mandate is having a negative impact on modest-wage workers, and that’s a pretty big deal.”

It is not clear, however, that the reduction in workers putting in more than 30 hours a week will persist.

Carter Price, a researcher with the RAND Corporation, called the dropoff in full-time employment “an interesting data point,” but cautioned that it is “unclear” why the effects of the employer mandate would show up in the second quarter of 2013, given that the penalty attached to the mandate was not supposed to start until 2014, and has been delayed until 2015.

“There may have been some preparation by firms in anticipation of 2014” and the implementation of the mandate, Price told the Examiner. He warned, however, that it “may be too early to see any results you could definitively attribute to the Affordable Care Act.”

As Bernstein and Van de Water note in their Politico op-ed, the number of employees that could be affected by the shift to part-time work is relatively small: the Obama administration “estimates that fewer than 1 percent of employees work 30 to 34 hours a week (and thus would be easiest for employers to shift below 30 hours), are employed by businesses affected by the employer mandate, and do not have insurance.”

View article comments Leave a comment