Economics, Health Care, Pethokoukis

Obamacare and part-time jobs (and what else we learned about Obamacare today: Oct 22, 2013)


What effect is the Affordable Care Act having on the labor market, particularly the mix of jobs between full time and part time? Many Obamacare critics have charged the (currently-delayed until 2015) employer mandate has been nudging companies to hire part-time workers instead of full-time ones so they don’t have to offer them healthcare insurance. There has certainly been lots of anecdotal evidence of this. The September jobs report offers the latest data that might shed some light on the controversy:

– In September, according to the volatile household survey, full-time jobs rose by 691,000, while part-time jobs fell by 594,000.

– For the year so far, full-time employment has risen by 1.03 million jobs, while part-time employment has fallen by 97,000. (The establishment survey, by the way, shows total job growth of 1.6 million.) Part-time jobs as a share of the overall economy works out to 18.9% vs. 19.2% at the end of last year.

No sign of an Obamacare Part-Time Job Effect based on those numbers.

So where did the claim come from?  It came from a rise in part-time jobs during the spring. From April through June, part-time jobs increased by 569,000 vs just 95,000 full-time jobs. But since then, full-time employment has taken the lead, increasing by 902,000 vs a 654,000 decline in part-time jobs. Given the infamously bumpy nature of the household survey, this all looks like mean reversion and noise.

But maybe the July delay in the mandate affected hiring? Maybe. But that news broke at the start of the month, and employers still hired 174,000 part-timers vs. 92,000 full-timers. Again, the chart at the top of this post shows a pretty volatile data set. As reporter Ben Casselman of The Wall Street Journal puts it: “The uptick in part-time employment earlier this year now looks like a statistical blip: Part-time employment fell in late 2012, then rebounded in early 2013, and has now fallen for two consecutive months. But even if the upward trend resumes, it’s doubtful that the health law is to blame.” At least so far.

Casselman also looks at working hours:

If the health law were driving employers to cut employees’ hours, the most vulnerable workers would likely be those working just above the 30-hour cutoff. That means the data would show a decline in those working 30 to 34 hours and an increase in those working less than 30 hours.

That isn’t what’s happening. The share of part-timers who say they usually work between 30 and 34 hours at their main job has been roughly flat over the past three years, at about 28%. (September data aren’t yet available.) If anything, it’s actually risen in the past year, though the change has been minor. The share working just under 30 hours has indeed risen somewhat, but the share working under 25 hours has fallen—suggesting that employers are giving part-timers more hours, rather than cutting full-timers’ hours back.

And here is what else we learned today, via AEI’s own Natalie Scholl:

1.) We knew that people who don’t get health insurance will have a penalty of $95 or 1% of their income (whichever is higher). But did you know that “The penalty increases gradually to $695 or 2.5 percent of income in 2016”?

2.) “A new analysis by Aon Hewitt predicts that the slow down in health care costs, which the company says hit a low of 3.3 percent in 2013, will end next year. The company predicts health care costs will rise 6.7 percent in 2014.”

3.) President Obama’s claim yesterday that almost six in 10 uninsured Americans will be able to get insurance for less than $100 a month gets fact-checked here. Spoiler: he’s maybe a little over-confident in his remarks.

4.) Health and Human Services Secretary Kathleen Sebelius will testify next week on the Obamacare website. Politico lists five questions she won’t answer. Number one: “What’s actually wrong with”

5.) One of those experts the government is bringing in to help with the glitches in the federal health exchange? Verizon. That said, “The odds that the problem will be fixed are ‘50-50,’ said Clark Kelso, California’s chief information officer under governors Gray Davis and Arnold Schwarzenegger. ‘They’ve got a short window here to try to fix things,’ Kelso said. ‘Simply throwing a lot of new programmers at something like this does not guarantee success.’”

6.) Here’s the answer to “why the feds didn’t have more skilled programmers for” Two of the reasons: uncompetitive compensation, and all the rigmarole, inflexibility and slowness we’ve come to know and love with government.

7.) “The stakes are huge – not just because of public opinion, but practically, in terms of creating the broad insurance pools which are key to the law’s success,” says Julie Appleby. “The risk in frustrating consumers is that those who are healthy or on the fence about enrolling may give up, leaving the unhealthy to persevere and enroll, which could drive up premiums in future years, potentially leading to what experts call “a death spiral,” where only the sickest people sign on.”

8.) So the website will be fixed–that we’ve been assured of over and over—but we haven’t been told who’s going to pay for that, or even how much it will cost. “The rule of thumb in the industry is that if something can be fixed for $1 before a project’s launch, it will cost 100 times that after the launch.”

9.) Update: “A federal judge on Tuesday ruled that plaintiffs could proceed with a suit challenging some subsidies for people who buy health insurance, but he refused to block the subsidies while the case proceeds, a mixed ruling for the Obama administration. The challengers are seeking to block subsidies for low- and middle-income individuals who buy health insurance through online exchanges run by the federal government.”

10.) If you’re wondering how worried to be, Megan McArdle has you covered: “Time to panic? No. But it’s time to prepare to panic. It sounds like the earliest anyone is projecting fixes is sometime in the middle of November. That’s the time when it absolutely has to work — and if it doesn’t, we should panic.”

11.) Consumer Reports advises you avoid the health-care exchange “for at least another month if you can,” as “Hopefully that will be long enough for its software vendors to clean up the mess they’ve made.”

12.) And finally, The Onion presents an alternative that at this point almost sounds better than the reality: “New, improved Obamacare program released on 35 floppy disks.”

10 thoughts on “Obamacare and part-time jobs (and what else we learned about Obamacare today: Oct 22, 2013)

  1. I am tempted to think that the Administration would have been better off not establishing exchanges in non-cooperative states. Then the residents of those states would have unleashed the full wrath of their frustration at not being able to get subsidized health insurance upon the heads of state politicians who denied them the subsidies soon to flow to California, New York, etc.

    • Per the Supreme Court ruling, they can’t expect you to pay a tax that they are unwilling to collect on. If they don’t offer an exchange in every state, then they violate the fourteenth amendment.

  2. If there IS indeed a conversion to part time jobs, it will actually ACCELERATE people who no longer can get employer-provided …. going to the exchanges.

    and once they go to the exchanges, they no longer will restrict their job searches to only employers offering insurance.

    they also will not fee restricted to stay at a job once their health insurance is portable.

    I think the shift to part time will actually accelerate the exchanges.

    • I think the fixation on how ObamaCare affects employment or employment status in a negative way, totally misses the bigger point.

      Anyone or let’s say many, who lose their employer-provided insurance – regardless of reason – is going to go to the exchanges even if they think they lost their insurance as a result of ObamaCare.

      As time goes by and more and more people have insurance from the exchanges – they are going to realize that it’s guaranteed insurance that is portable and the rates community rate – something not guaranteed by other types of insurance.

      Once they get insurance that way, what would drive them back to seeking employer-provided or open-market insurance or other kinds that are inferior in terms of guaranteed access and portability?

      so the more that people get kicked out of employer-provided, the more people will likely gravitate to ObamaCare.

      Isn’t this why the GOP is freaking out over this?

      • Because it’s NOT portable. You’re still on a private plan restricted by your location, often in areas where the insurance provided requires travel to other counties to be covered. In Indiana, Anthem offers insurance in counties where it has no providers, requiring you to pay out-of-network fees or find more expensive plans.

        • re: portable

          between jobs in the same state and with some to other states.

          no.. people do not think part time work is “wonderful” but they also find no options for health insurance also “not wonderful”.

          this is better for a LOT of people who don’t have options right now – but by no means perfect.

          but the bigger point is, once someone gets insurance from the exchanges, they are no longer tied to one job..nor are their job searches restricted to only jobs that offer employer-provided.

          they are free to take full advantage of the job market per their own needs and priorities without having health insurance limit the options.

          that’s better than now for many.

  3. Does the GOP say the Veterans Administration does a lousy job? Are they champing at the bit to defund the VA, and give vouchers to vets to find their own health care?

    The VA isn’t even socialism—it is Soviet-style (1970s version) health care, as close to communism as we get in the USA. The doctors, the nurses, the facilities, all publicly owned and paid for.

    Until the GOP can face down the VA, I really can’t say they are the party of small government, or have any sort of principles at work.

    BTW: 3.5 million Americans receive monthly disability checks—from the VA. How did that number get so big? Do I smell taxpayer rip-off?

    All that said, I I think Obamacare is a health plan designed to benefit the industry. not consumers. It will cost a ton.

    • You could make the same point about TRICARE – the Us military healthcare for dependents.

      why not just give them voucher also and let them go out and get whatever kind they want on the open market?

      ObamaCare is going to have a lot of people paying for insurance who were not able to get it before and it will have huge risk pools that will keep prices lower but it will depend on how many people who will buy it but won’t use it heavily.

      People without insurance, get health care. We do not turn anyone away from getting medical care. The issue is who pays for medicare care for the uninsured because it’s not free and someone does pay.

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