How Obamacare is making it harder to find a full-time job
The drag Obamacare has had on the economy has been hard to quantify in the two-plus years since it became law, because so many of its economy- and job-altering provisions had yet to be written. But that’s changing, and the law’s negative impact on the economy is becoming clearer. The Washington Post’s Robert Samuelson explains one of the ways: the law’s exemption for part-time employees and its definition of what counts as “part time”:
In September, 34 million workers, about a quarter of total workers, were part-time, reports the Bureau of Labor Statistics (BLS). But the BLS defines part-time as less than 35 hours a week; Obamacare’s 30 hours a week was presumably adopted to expand insurance coverage. There are now 10 million workers averaging between 30 and 34 hours a week. To the BLS, they are part-time; under Obamacare, they’re full-time.
Employers have a huge incentive to hold workers under the 30-hour weekly threshold. The requirement to provide insurance above that acts as a steep employment tax. Companies will try to minimize the tax. The most vulnerable workers are the poorest and least skilled who can be most easily replaced and for whom insurance costs loom largest. Indeed, the adjustment has already started.
As first reported in the Orlando Sentinel, Darden Restaurants — owners of about 2,000 outlets including the Red Lobster and Olive Garden chains — is studying ways to shift more employees under the 30-hour ceiling. About three-quarters of its 185,000 workers are already under, says spokesman Rich Jeffers. The question is “can we go higher and still deliver a great [eating] experience.” The financial stakes are sizable. Suppose Darden moves 1,000 servers under 30 hours and avoids paying $5,000 insurance for each. The annual savings: $5 million.
Samuelson notes there are downsides for companies to have employees working fewer hours: The jobs may become less attractive, turnover may increase and, with it, training costs may rise. But the evidence clearly shows that even many employed Americans are still looking for more work because all they can find is part-time work.
In any case, his broader point, to which I subscribe, is that the economy isn’t strong enough — hasn’t been for a few years now — to withstand this kind of unnecessarily, artificially created uncertainty. Businesses always operate with uncertain market conditions, but they don’t need government adding to this uncertainty by passing laws that muddle the labor market — and thereby undermine the entire point of passing the law in the first place.
– By Kyle Wingfield
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164 comments Add your comment
DownInAlbany
October 22nd, 2012
3:45 pm
Tiberius: jump to conclusions much? Read my subsequent post…
Reality
October 22nd, 2012
3:46 pm
@DownInAlbany,
I understand your point. However, those businesses that make that choice will have to deal with employees that are far from loyal and likely not to be good workers, right?
My point is simply – why cannot all businesses be like yours? Why cannot they see that by treating people “right” it makes good business sense and human sense?
In other words, why are so many corporations so very greedy and short-sighted?
Tiberius - pulling the tail of the left AND right when needed
October 22nd, 2012
3:48 pm
But hey, Reality, let’s take your suggestion and let’s price our goods further out of the world market by increasing the cost of labor so high.
I’m sure the rest of the world is just clamoring for those higher-priced American-made goods – oh, wait . . .
DownInAlbany
October 22nd, 2012
3:48 pm
I don’t know, Reality. I only know that our office certainly seems to be the exception to the rule and I’m proud of it!
Tiberius - pulling the tail of the left AND right when needed
October 22nd, 2012
3:49 pm
DownInAlbany, I’m glad you can provide health care to your employees today.
But when the day comes when it gets to providing health care or keeping your doors open, you’ll keep your doors open unless you’re ready to retire.
Reality
October 22nd, 2012
3:57 pm
@Tiberius – It is people like you with attitudes like yours that make Georgia lag far behind in employment in the Country. Our State is so very backwards it is sad – and yes most people here do think similar to you.
Our State thinks that by giving companys more and more “incentives” to move here that this will solve the problem. However, with all of these “incentives” we give away the proverbial farm. Sure, some may move here and then pay minimum wage for a few years until the “incentive” expires. Then they pick up and move somewhere else leaving behind an empty building and unemployed people (think Ford and soon Kia).
Our State is determined to go the republican route of giving away our tax money money money. Lure companys here with money.
Sure, we can get some films made here – if we provide enough resources to them and give them money. What kind of jobs are those? They are jobs playing “extras” that pay maybe $50 per day! We are not “right to work” State and don’t recognize unions so those film companys can pay pennies in Georgia compared to LA. Why do you think Tyler Perry has been so successful in Georgia?
How about companys WANTING to come here because we are GOOD EMPLOYEES? How about we have an EDUCATED work force that can help their business grow? Why not try this route for a change in Georgia?
Doing what we do now is just not working. We are lagging in most every category of the economy, yet we continue to elect the same republicans to office. How stupid are we really?
Reality
October 22nd, 2012
3:58 pm
Tiberius – How about NOT paying the CEO millions of dollars a year rather than your option of increasing prices? Ever thought of that?
Reality
October 22nd, 2012
4:00 pm
@Tiberius – Romney was not successful in Mass. All he did was agree with the Democrat State Representatives. Yet, you seem to want to give him credit? LOL!
Again, that is why his own State does not support him at all!
Lambeau
October 22nd, 2012
4:13 pm
Reality, you live in such a delusional world. You want everything to be sunshine and butterflies and have everyone be “morally right” to what your standard of “morally right” is. Truth is, we do not live in that world so why not become a realist and realize the world you keep talking about will not happen.
Reality
October 22nd, 2012
5:26 pm
@Lambeau – Because I believe in a better Country and not one based on greed and hate. I see other Countries succeed in this so why cannot we?
Let’s move forward to improve. Don’t go backwards to repeat failure.
JDW
October 22nd, 2012
5:47 pm
“we do not live in that world so why not become a realist and realize the world you keep talking about will not happen.”
Of course not…but shouldn’t one strive to come as close as possible?
JDW
October 22nd, 2012
5:55 pm
@Tiberius…”The ban that was being discussed was for Federal FUNDING of abortions”
WRONG YET AGAIN…
“In a televised debate, Romney was asked “If Roe vs. Wade was overturned and Congress passed a federal ban on all abortions and it came to your desk, would you sign it, yes or no?”"
http://www.politifact.com/truth-o-meter/article/2012/oct/19/politifacts-guide-mitt-romney-and-abortion/
independent thinker
October 22nd, 2012
8:32 pm
The story about Romney and finacial control of voting machines can be found in the following left wing rag:
http://www.forbes.com/sites/rickungar/2012/10/20/romney-family-investment-ties-to-voting-machine-company-that-could-decide-the-election-causes-concern/2
conflicts of interest is an alien concept for the Romney folks
Closing my business if Obamacare doesn't get repealed!
October 24th, 2012
7:05 am
Two weeks and counting before my employees know if they will have a job. I won’t allow some radical nut case to determine my healthcare. I hate it for my employees but they have known to be prepared for the last 4 years. As I “private” biz owner, I have had Obama supporting employees in the past but their jobs got eliminated. America wake up! Small business creates the majority of jobs today, certainly not Washington!