POLITICS: PennAve

San Francisco Fed: Weak demand, not Obamacare, behind rise in part-time work

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Obamacare,Jobs,Health Care,PennAve,Joseph Lawler,Economy,Federal Reserve

Economists at the Federal Reserve Bank of San Francisco are attributing the high proportion of part-time jobs to economic slack rather than to Obamacare's employer mandate.

In an economic letter published by the bank Monday, Rob Valetta and Leila Bengali write that the level of part-time work, which has remained near 20 percent since the official end of the recession in 2009, “is not unprecedented, although its persistence during the ongoing recovery is unusual.”

But the two researchers write that the impact of Obamacare’s employer mandate on part-time employment is “likely to be small.” The mandate requires businesses of 50-plus workers to offer health benefits to employees working more than 30 hours a week.

Valetta and Bengali cite research that suggests that only 1.8 percent of U.S. workers would be subject to the mandate. They also point to the example of Hawaii, which has an employer health care mandate in place but has only seen a slight increase in part-time work.

Instead, they blame “labor market slack” for the rise in part-time jobs.

The increase in part-time labor has come among those working part-time for economic reasons, as opposed to personal reasons. The Current Population Survey divides these workers into two categories: those working part time because slow business conditions caused a cutback in hours, and those who could not find full-time work.

It is the first category that is behind the current high level of part-time workers, Valetta and Bengali note.

Because the number of people working part-time due to slack is the category that is more sensitive to the business cycle, the Fed researchers pin the rise of part-time work on “general labor market slack.” They also predict that the current high level of part-time work will not be a permanent feature of the U.S. labor market.

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