Adding to the uncertainty surrounding the president’s signature health care law is the realization that Obamacare is fueling the nation’s transition away from full-time employment. President Obama’s hometown paper lamented that the health care law “will give companies – and, surprisingly, their workers – a big incentive to embrace more part-time employment.” The Chicago Tribune is not the first to express this concern. The Washington Post’s Robert Samuelson recently wrote, “Obamacare intensifies the pressures, because the incentives against hiring full-time workers are so obvious.” Mort Zuckerman adds in the Wall Street Journal: “The health insurance law requires employers with more than 50 workers to provide health insurance or pay a $2,000 penalty per worker. Under the law, a full-time job is defined as 30 hours a week, so businesses, especially smaller ones, have an incentive to bring on more part-time workers.”
Editorial: The part-timing of America
July 28, 2013
The Affordable Care Act will give companies — and, surprisingly, their workers — a big incentive to embrace more part-time employment. That isn’t necessarily a problem, except when it comes to paying the health-insurance bills for all those part-timers. Looks like that job will fall to you, taxpayers.
Some of the motives at play here will strike you as familiar; others are fresh insights on the part-timing of America.
Opponents of Obamacare have long predicted that the 2010 law would lead to reduced working hours for many Americans. We all know from high-profile announcements that some employers, notably restaurants, plan to avoid hiring full-time workers because of the new health care rules:
Under Obamacare, employers with 50 or more full-time workers will be required to offer health insurance to those putting in at least 30 hours a week, or pay a penalty. That’s a big incentive to keep the staff at 49 full-timers or, if the business demands more bodies, a big incentive to have as many employees as possible working a maximum of 29 hours.
Turns out the incentives to go part time will be even greater than we suspected: Several million employees could work fewer hours for as much take-home pay by shifting to part-time labor. University of Chicago economist Casey Mulligan has his finger on how that will work. As the law kicks in, the incentive for some workers will be so strong that free-market champion Mulligan says only “chumps” would resist it. …
It’s troubling, though, that as the abutting graphic suggests, too many part-timers who would rather have full-time jobs just aren’t finding them. The question going forward is whether those workers ever will attain what they want — or whether they and their potential employers will decide that full-time jobs are too costly for both of them.
Part-time work does become a problem when Washington tilts the balance of incentives against full-time work. Not only will Obamacare raise costs for the government, it stands to make one of the most competitive features of the U.S. economy — a flexible labor market — less efficient.
One more reason to rewrite, or halt, Obamacare.
Read the complete piece here.