Main Cause of Increase in Part-time Jobs Not Obamacare, Says Study

Posted by Jake Richardson on Oct 14, 2013 10:32:00 AM


Two researchers at the Federal Reserve Bank of San Francisco have conducted a study that contradicts the general notion found in some press stating that the Affordable Care Act is likely to wreak havoc on the national economy by causing employers to change fulltime positions to part-time in order to avoid having to pay for health insurance for their employees.

In their own words, "Moreover, recent research suggests that the ultimate increase in the incidence of part-time work when the ACA provisions are fully implemented is likely to be small, on the order of a 1 to 2 percentage point increase or less (Graham-Squire and Jacobs 2013). This is consistent with the example of Hawaii, where part-time work increased only slightly in the two decades following enforcement of the state’s employer health-care mandate (Buchmueller, DiNardo, and Valletta 2011)."

However, they cite a UC-Berkeley study that says the number of workers who are most at risk from having their hours reduced is very small, "The 2.3 million workers identified as at greatest risk for work hour reduction represent 1.8 percent of the United States workforce. This is consistent with the research on the impact of Hawaii’s health care law on work hours. Hawaii requires firms to provide health insurance to employees working 20 hours a week or more, so the cost to employers for full time workers are much greater in Hawaii than under the ACA, while the hour threshold is lower. Buchmueller, DiNardo and Valetta (2011) found a 1.4 percentage point increase in the share of employees working less than 20 hours a week as a result of the law. In Massachusetts, where the employer penalty is smaller than in the ACA ($295 per year), there was no evidence of a disproportionate shift towards part time work compared to the rest of the nation."

So, what does all this mean? It is a counterpoint to the noise in the mass media about the coming doom for American workers. We know the mass media resorts to hyperbole and even manipulation at times, in order get attention from the most number of people.

Academics like these reseachers may work many hours by themselves, sequestered far away from the bright lights trying to figure out what is happening in the real world using data and careful analysis. They can still make mistakes, but the foundation of their inquiry is not just stories, or anecdotal evidence.

Anecdotal evidence can have a strong appeal in mass media, because everyone likes a good story. Some of the most appealing stories are the ones that are also carry the strongest emotional charge. Fear and pity are some of the emotions being played up by stories of workers having their hours cut. Victimhood is also in play, because some of the news stories make it seem like the government is going to be the cause of their suffering.

Along with academic research, there are other news stories telling us that not every company is going to cut employee hours. In fact, Starbuck's has stated they will not cut employee benefits. The positive publicity generated by this public announcement probably has already paid some dividends, and was both an effective recognition of their employees value and a clever public relations move.

Because of the ACA rules, employers may be even more motivated to be careful about time tracking. Given the important emerging Big Data trend - and greater use of predictive analytics - it seems we are all headed down the road toward a more scientific kind of inquiry, and less emotionally manipulative propaganda.


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