Though the Associated Press is now basically admitting it, we all knew it. Obamacare's 30-hours-per-week definition of a "full-time employee" for employer health insurance coverage purposes has been responsible for one of the fundamentally negative changes in the American workforce — a noticeable move away from full-time to part-time employment.
In a report with a current Saturday morning time stamp at the AP's national web site which originally went up on Friday, the wire service's Christopher Rugaber and Josh Boak covered the "new normal" in the job market. This writeup will receive yours truly's fuller attention later. But for now, I must note that the pair's report largely abandoned the AP's and the establishment press's years of near denial (bolds are mine throughout this post):
... the generally improving job market still bears traits that have long been regarded as weaknesses. (Those of us in the real world still regard them as weaknesses. — Ed.) Among them:
... The number of part-timers who would prefer full-time work remains high.
About 6.5 million workers are working part time but want full-time jobs, up from 4.6 million before the recession began. This is partly a reflection of tepid economic growth. But economists also point to long-term factors: Industries such as hotels and restaurants that hire many part-timers are driving an increasing share of job growth, researchers at the Federal Reserve Bank of San Francisco have found.
As more young adults put off working, some employers are turning to older workers to fill part-time jobs. Older workers are more likely to want full-time work, raising the level of so-called involuntary part-time employment.
Many economists also point to the Obama administration's health care reforms for increasing part-time employment. The law requires companies with more than 100 employees to provide health insurance to those who work more than 30 hours.
Michael Feroli, an economist at JPMorgan Chase, says this could account for as much as one-third of the increase in part-time jobs.
I think we can safely say that when the AP refers to "many economists," they are in this instance describing "economists who are not working in the Obama administration or who are not in deliberate partisan denial."
One interesting element of this de facto admission is that the ADP Research Institute, the producer of the widely-followed monthly private-sector employment report, trumpeted the results of a report it published two weeks ago claiming the opposite:
The costs associated with providing health care coverage to employees working 30 or more hours is one of those variables, but certainly not a major driver. Analysis suggests that the ACA’s impact on employment policy up to this juncture has been extremely small.
The one-third cited by the Chase economist in the AP report is not "extremely small" — and even that could be a significant underestimate. In any event, one could easily ascribe much of the remaining two-thirds, if not directly to Obamacare, then to the historically weak slow-motion "recovery," the speed of which can be blamed on the Keynesian fiscal and monetary policies on steroids seen during the past six years. These efforts were supposed to "stimuluate" the economy. All they have really stimulated is very weak growth accompanied by an unprecedentedly long atmosphere of pervasive uncertainty. As a result, many businesses are sticking with part-timers because they don't have enough confidence in the economy's direction to take on more full-time staff.
Additionally, a report at Investors Business Daily in March cited a human resource group's survey demonstrating another significant Affordable Care Act impact on part-time worker treatment, i.e., reduced hours:
... five years ago when ObamaCare was being enacted, we and many others warned that its coverage mandates for employers would result in hours being cut back and workers being laid off. We were criticized at the time as Chicken Littles.
Now comes a survey of 743 personnel executives by the Society of Human Resource Management, as reported by Robert King of the Washington Examiner, that shows businesses are doing just that. Nearly 14% of firms have cut part-time hours for workers, King wrote, and another 6% plan to do so.
Still worse, 5% of companies have already either cut or plan to cut the total number of workers they have, thanks to ObamaCare.
The fact is that seasonally adjusted full-time employment is still over 800,000 below its November 2007 peak. Part-time employment since November 2007 is up by 2.8 million. Those changes didn't occur in an economic or regulatory vacuum.
Unfortunately, neither the surveys cited nor the AP report address the possible impact of Obamacare on temporary employment, which has exploded to all-time record levels during the past six years. It appears that many firms may have been using temps to avoid breaking the current 100-employee threshold at which the 30-hour coverage currently kicks in.
Next year, that threshold is on track to come down to 50 employees. No longer facing reelection, the Obama administraion will probably not waive this mandate unless the economy is obviously tanking (and even then, it might not). But since the 50-employee threshold is based on prior-year average employment, a whole new and larger group of employers is now likely using this strategy. This could explain why temp employment continues to soar — and why it would be reasonable to expect that the use of part-timers will continue to increase.
Cross-posted at BizzyBlog.com.
