Pethokoukis, Economics, U.S. Economy

Is the talking point about Obamacare and part-time jobs now dead? Should it be?

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One recent center-right criticism of the Affordable Care Act (which I have been blogging about) is that the employer mandate is nudging companies to create part-time rather than full-time jobs. There is certainly lots of anecdotal evidence to support this charge. And the issue was getting enough traction to earn an official White House response.

Finding hard data is tricky since government numbers on the part-time/full-time jobs mix is based on the monthly small-sample household survey, which can be volatile. But heading into the August jobs report, 71% of the jobs created this year were part-time jobs. In August, however, the number of full-time jobs increased by 118,000 while the number of part-time jobs fell by 234,000. So now just 59% of the jobs created this year are part-time gigs. And even that number is funky. My AEI colleague Mark Perry explains:

Much of the 59% part-time figure for jobs added during the 8-month period from January to August period was driven by some pretty wild numbers in the month of March. It’s widely known that the BLS jobs data from the Household Survey are extremely volatile in certain months, and March was a perfect example. According to the BLS, there was a loss of 240,000 full-time jobs in the month of March and an increase of 360,000 part-time jobs, and both of those monthly job numbers deviated significantly from the averages over the last 12 months for those two job categories of 143,000 new full-time jobs and 24,000 new part-time jobs per month.

If you omit the month of March as an outlier, and consider the other seven months of 2013, part-time jobs represented only 19.1 percent of the total jobs created so far this year.

Here is how I addressed this issue in my new National Review column:

First Trust economists Brian Wesbury and Robert Stein observe that some of the largest payroll gains recently have been in sectors where firms can more easily shift their employee mix from full- to part-time. Retailers and restaurants now make up the largest share of private payrolls in at least a generation. “It’s hard to believe Obamacare has nothing to do with this,” Wesbury and Stein conclude.

A San Francisco Fed report supports the White House in part, finding the current level of part-time work largely within post-recession historical norms, but adds that its “persistence during the ongoing recovery is unusual.”

Now the SF Fed analysis also highlights separate research suggesting Obamacare will likely cause at least some increase in part-time work. Here is the conclusion from the UC Berkeley Labor Center:

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.

The Great Recession caused a roughly 3 percentage point jump in part-time work as a share of total employment. The UC Berkeley study suggests Obamacare could well cause an increase in part-time work with an upper bound of 2 percentage points — or nearly two-thirds of the recession’s impact — but probably much less. Whether that is a lot or a little at least partially depends on your overall judgement on the worth and efficacy of the healthcare reform law. Perry’s bottom line: “Although it’s certainly possible that part-time jobs are increasing relative to full-time jobs, that trend can’t yet be confirmed.”

2 thoughts on “Is the talking point about Obamacare and part-time jobs now dead? Should it be?

  1. What is the effect of suspending the Obamacare employer mandate for another year? Isn’t it a bit difficult to try to measure the impact of a mandate more than one year before it goes into effect? I don’t think we are going to see much better than anecdotal evidence for a while yet.

  2. The UC Berkeley study suggests Obamacare could well cause an increase in part-time work with an upper bound of 2 percentage points — or nearly two-thirds of the recession’s impact — but probably much less

    There are ~10 million persons (7.5% of working persons) that work 30-34 hours per week, which is the upper range of part-time workers surveyed by the BLS before the full time 35+ hours per week kicks in.

    Are the studies saying that:

    1. 2% of 10 million move from 30-35 hours per week to 25-29 hours per week, which is not a big deal, call it 200,000, or,

    2. 2 percentage point increase (from 7.5% to 9.5%), call it 2.6 million.

    There is no evidence in the data that point 1, let alone point 2, is happening in Q3 2013.

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