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Is Health Care Reform Creating More Part-Time Work?

New York Times, September 27, 2013

 By Phillip M. Boffey

Republican critics of the Affordable Care Act often argue that the reform law has caused a big uptick in the number of part-time workers. The A.C.A. requires companies with 50 or more employees to provide health insurance to those working 30 hours or more a week, or pay a penalty. The theory spun by Republicans is that employers are maneuvering to escape that penalty by reducing the hours of most workers to below the 30 hour threshold. The critics say that’s why many job-seekers can’t find full-time work and many job holders are finding their hours reduced. As Senator Mitch McConnell of Kentucky, the Republican leader, said on the floor of the Senate recently, “Obamacare is a big reason we’re turning into a nation of part-time workers.”

But neither the facts nor logic support that claim. The recession, not the A.C.A., caused the increase in part-time work, which – besides – largely occurred before the reform law was enacted.

Two researchers at the Federal Reserve Bank of San Francisco published an analysis in late August that largely absolved the reform law as a cause of part-time work. They showed that part-time work as a share of total employment climbed to 20.3 percent in 1983 in the aftermath of a recession during the Reagan administration, fell to 17 percent during the boom years of the 1990s, and zoomed back up after the severe recession in 2008 and 2009 to reach 19.7 percent in 2010, the year the A.C.A. was enacted. Since then it has trended down very slightly but remains stubbornly high.

Most part-time work, even in the worst times, is actually voluntary. Many workers want to cut their hours to spend time on other activities. Of course there is also a population of people who would like to work full-time but can’t find a suitable job. The Federal Reserve researchers did spot a shift toward involuntary part-time work in recent years but attributed that to the recession. They expect involuntary levels to fall as the labor market recovery continues.

Although some critics contend that the reform law is the reason part-time work levels have not dropped more quickly, the San Francisco Fed analysts scotched that idea, too. They argued that the impact of the law so far and its ultimate impact are likely to be small, perhaps a 1 to 2 percentage point increase in the incidence of part-time work, or even less.

Such estimates are consistent with a data brief issued last February by the University of California at Berkeley Labor Center, which identified industries with the highest percentage of employees working slightly over 30 hours and thus vulnerable to being ramped down to just under that threshold. All told, some 2.3 million workers were identified as at greatest risk. That’s a lot of people but only 1.8 percent of the total workforce. It is not a major body blow to the job market or the economy. Analysts at the Center on Budget and Policy Priorities and at the Committee for Economic Development reached essentially the same conclusions.

Hawaii provides a test case of what is likely to happen. Part-time work increased only slightly there – 1.4 percentage points – in the two decades after a state law required employers to provide health insurance to employees working 20 hours a week or more.

We hear many anecdotal reports of employers who say they plan to rely heavily on part-time workers because of the supposedly onerous requirements of the A.C.A. Some may be blaming the reform law for changes they would make anyway. Some may be bluffing. Some may really mean it. The employer mandate has been delayed until 2015, 15 months from now, so it will be some time before we know its real impact. We hope and suspect that most employers care about the health of their workers and want to retain them by providing decent insurance instead of looking for ways to cut them adrift.

 

Original Article

 

 
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