Wednesday, August 28, 2013

This isn't rocket science, people

Not long ago, I was involved in a discussion on another blog about how millennials aren't lazy or unmotivated; they're having trouble finding work, and the work they do find is often part-time at best.  In the conversation I mentioned Obamacare only to be shot down: the liberal commenters at that site insisted that Obamacare has nothing to do with the shrinking in full-time positions and their replacement by part-time jobs.
Not so fast, according to this piece at Forbes provocatively titled: It's Fact, Not Anecdote, That Obamacare Is Turning Us Into A Part-Time Nation:

The Obama administration continues to discount the huge impact its health overhaul law is having in turning America into a part-time nation, calling reports anecdotal and not based on complete data. [...]

Loren Goodridge, the owner of 21 Subway franchises, says he has no choice but to cut the hours of his employees to 29 a week to avoid the law’s penalties.

The negative effects of the law reach the education industry as well. St. Petersburg College, a public university in Florida, is reducing the hours of 250 faculty members because the college says it cannot afford to provide them with health insurance.

Joseph Hansen, the president of the United Food and Commercial Workers Union that originally supported the law, says the health law will have a “tremendous impact as workers have their hours reduced and their incomes reduced.”

Bureau of Labor Statistics data show that the ratio of part-time to full-time jobs has completely flipped this year from historical trends.  Last year, six full-time jobs were created for every one part time job.  This year, only one full-time job is being created for every four new part-time jobs.

The shift to part-time has accelerated over the past several months because of the “look back” provision in ObamaCare that sets the baseline this year for the number of full-time workers a company employs to determine their compliance with the employer pay-or-play mandate.

The administration may have been trying to stop the damage when it announced in July it would delay for a year the reporting requirements for the health law’s employer mandate – the requirement that businesses with 50 or more employees provide health coverage that is acceptable to the government or pay a fine of $2,000 to $3,000 per employee per year.
Read the whole thing, but it's pretty clear that what we're seeing in the increasing number of jobs offering no more than 29 hours a week is indeed directly linked to employers' fears about the costs associated with Obamacare, which remain shrouded in financial mystery.

This isn't rocket science, people.  When you tell employers that their costs per full-time employee are going to rise, but that the exact dollar amount of the increase isn't all that easy to figure out and we'll learn about what the law requires once we start implementing it, you are creating a situation which makes employers very, very reluctant to hire new full-time employees.  This is because unlike politicians, most businessmen actually have to stick to their budgets in order to earn more in profits than they spend on overhead.  Sure, the biggest multinational corporations, the ones that agitated for Obamacare, the ones that already hire more part-time employees than full-time ones, might have enough room in their budgets to cover the slight increase in costs for their full-time employees (or they'll just initiate a new round of layoffs at corporate headquarters to come out ahead, as they usually do in these situations).  But the smaller companies, big enough to fall under the healthcare mandate but small enough to operate a bit closer to the financial knife edge, just don't have that kind of luxury (or the political clout to get their company exempted from the ACA requirements).  And so we are transitioning into a nation where a lot of employable people will only be able to work part-time, even though they will still be required to use some of that dwindling paycheck to buy into the health care scheme.  What a country.


Barbara C. said...

Don't you know that evil businesses should give up this odious concept of profit? I'm not talking about excessive profit; I'm talking about even enough profit to stock pile away to keep things afloat during a bad year or to reinvest in expanding jobs. Profit is just greedy in any form...evil businesses.

Muscovite said...

I agree completely, Red. And it's not like we couldn't have seen this coming... the only surprise will be if this is the only unintended consequence from 2000 pages of legislation that had to be passed before we knew what it all meant.