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Is Obamacare Creating a Part-Time America?

Politics / US Politics Jul 23, 2013 - 12:33 PM GMT

By: Money_Morning


Frank Marchant writes: America has become a part-time nation. The Bureau of Labor Statistics recently reported that in June part-time employees in the labor force reached an all-time high of 28 million, 3 million more than when the recession began in 2007.

The economy lost 240,000 full-time jobs in June and added 360,000 part-time jobs, the BLS noted. Of the 753,000 jobs created this year, 589,000 were part time.

The real unemployment rate in June, the U6, stood at 14.3%, up from 13.8%, a figure that includes part-time workers seeking full-time jobs and those who have become discouraged and are no longer looking for work.

Now many economists and many in the financial press with sympathies to the administration have attributed the rise in part-time America to uncertainty among employers about future profitability and growth and not to the looming Obamacare mandate.

It's ironic that in trying to play down Obamacare's influence on the job market, they end up dissing the president's stewardship of the economy.

However, Obamacare has likely played a significant role in the part-time job wave. Under the Affordable Care Act, companies with 50 or more full-time workers must provide health insurance to all full-time employees, those working 30 or more hours per week.

So if your workers don't work 30 hours per week you don't have to provide health insurance. It makes economic sense to have a part-time work force in many cases. Even with the administration's recent one-year extension of implementing the employer mandate until 2015, most small companies are still preparing to it.

A reported 74% of small businesses are positioning themselves to slash hours, layoff workers or both.

Obamacare is leading to lifestyle changes in the workforce. Instead of having one job, people are beginning to work two or three part-time jobs. The cost of employees transporting themselves between several jobs will be more expensive than commuting to just one.

Though the economy still makes it a rough slog for many business owners, they state that their biggest challenge is Obamacare as seen in the chart below.

Challenges facing small business today

From the Washington Examiner

Many companies already are in the process of adjusting their work environments to the changes brought on by Obamacare. Some of these firms include.

Walmart: (From Reuters), "This is a new company policy": an anonymous Walmart staffer. (Additional quotes from assorted Walmart managers)

"Full-time people are getting slimmer and slimmer," said a supervisor at a store in North Carolina, who asked not to be named, as did other store-level employees who were interviewed for this story, because she is not authorized to talk to the media.

"The five new employees hired this year at the store are all temps and hours of existing employees are being cut."

"Everybody who comes through the door I hire as a temporary associate," said a store manager in Alaska, who asked not to be identified. "It's a company direction at the present time."

Walmart, originally a huge backer of Obamacare is now moving health costs to states by either eliminating, or cutting full-time employees to part time.

CKE Restaurants (Owner of Hardee's) stated it will begin to hire part-time workers to replace full-time employees who left." The company owns the Hardee's, Carl's Jr., Red Burrito, and Green Burrito restaurant chains.

Treadwell Enterprises (a diffuse fast food empire, including a few Taco Bells) In Guthrie, Oklahoma, a Taco Bell employee came forward and told local media outlet News 9, "They informed everybody that nobody was considered full-time any longer, that everybody was now considered part-time, and [they] would be cutting hours back to 28 hours or less due to Obamacare."

AAA Parking According to a March 2013 Atlanta Business Chronicle story, an Atlanta-based parking garage company planned to cut half of its 500 full-time hourly employees to part-time hours.

Regal Entertainment group the largest movie theater chain in the US has cut the hours of numerous employees to 30 hours to by-pass Obamacrare.

Businesses are not alone in cutting employee hours. Entire cities are cutting hours to avoid paying benefits under Obamacare.

Long Beach CA is cutting hours of 1,600 part-time workers to fewer than 27 hours per week. Bill Dombrowski, head of California Retailers Assoc. said, "Under the requirements of the, Affordable Care Act. "Cuts are the only way to survive economically."

Labor Union officials also are extremely concerned about the effects of Obamacare on full-time employees and have voiced that concern to the White House, warning that Obamacare will cost many of their members their jobs.

Federal Reserve Chairman Ben Bernanke weighed in. He agrees the Obamacare mandate is causing employers to hire part-time workers, rather than full-time employees, but refused to say if Congress should delay all the law's mandates.

" Obamacare regulations have caused some companies to hire part-time employees, rather than full-time." Ben Bernanke

Source :

Money Morning/The Money Map Report

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