The White House claim that Obamacare is not reducing full-time employment

at 06:00 AM ET, 07/22/2013


(Susan Walsh/AP)

“If you look at the economic data, the suggestion that the [Affordable Care Act] is reducing full-time employment is belied by the facts….The data reflects that there is not support for the proposition that businesses are not hiring full-time employees because of the Affordable Care Act.”

--White House Press Secretary Jay Carney, news briefing, July 16, 2013

Some readers questioned this assertion, having read articles such as one that appeared in The Wall Street Journal last week, titled “Restaurant Shift: Sorry, Just Part-time.” In fact, Carney’s statement was in direct response to a question about the article.

Forgive us for being press critics, but the story actually did not live up to the headline. It was largely anecdotal in nature, with numerous caveats and at times speculation. We encountered the same issue when we examined the case of the City of Long Beach amid reports that it was shifting 1,600 workers to part-time because of the health care law. The initial reports were overstated.

That’s part of the problem at this point. Critics may seize on a month’s data here or an anecdote there, but the full impact of the Affordable Care Act, aka Obamacare, on employment will not be felt until after it is fully implemented. (The employer mandate supposedly pushing companies to hire part-time workers, in fact, has been delayed until 2015.)

Still, one would expect the law to have some impact, especially at the margins. As of 2015, companies with more than 50 full-time workers must provide health insurance to all workers or face a $2,000 per person penalty, after the first 30 full-time employees. There also is a separate $3,000-per-employee targeted penalty if the employer coverage is inadequate or unaffordable, though it can’t exceed the first penalty. Moreover, a full-time job is defined as just 30 hours per week.

The vast majority of firms with more than 50 employees — about 96 percent — already offer health-care coverage, but not necessarily to all employees. By one estimate, derived from Employee Benefits Research Institute research by an Obamacare critic, 46 percent of the nation’s uninsured workers are employed by large firms.

University of Chicago professor Casey B. Mulligan, in compelling detail, has explained how the law has very strong incentives to encourage more people to shift to part-time work, especially workers who are only working full-time in order to get health insurance. But he says it will take probably three years of data to understand fully how Obamacare has affected labor markets. Dismissing anecdotal newspaper reports, he said: “I don’t look at what people say they will do. What economists study is what people actually do.”

In general, we avoid fact checking disputes among economists, as such debates do not easily lead to Pinocchios. In any case, most experts agree the data at this point is rather thin. Still, given the questions raised by readers, we asked White House officials to show us the evidence for Carney’s assertion.

The administration’s case

White House officials cite Bureau of Labor Statistics data to say that most job growth since 2009 has been full-time—87.2 percent--which they say is in line with the first 48 months of previous recoveries. The administration concedes that the number of involuntary part-time workers spiked up 322,000 in June, but says that nearly 30 percent of the increase was due to federal employees being furloughed because of the sequester. (Note: because of a typo, this column, when first posted, incorrectly said “nearly 20 percent.”)

Indeed, month-to-month series in the BLS Household Survey is what economists say is “noisy” data—too volatile to be of much use. June could well be an aberration, given that if you just use the May numbers, so far in 2013, 74,000 additional workers per month were in full-time jobs, while 39,000 additional workers per month were in part-time jobs.

Moreover, over the past 12 months (year ending June 2013), 116,000 additional workers per month were in full-time jobs, while just 16,000 additional workers per month were in part-time jobs.

Administration officials pointed to two other data points:

■According to the BLS Household Survey, 85 percent of the gain in employed workers since June 2009 is due to additional full-time positions. And since Obamacare passed in March 2010, over 90 percent of the gain in employment is due to additional full-time positions.

■According to the BLS establishment survey, the average workweek has risen 0.7 hours since the recession ended in June 2009. Moreover, at 33.7 hours, the average workweek has essentially returned to its level at the start of the Great Recession. These developments would not have occurred if employers had cut back on their workers’ hours during the current recovery.

The Bottom Line

It is important to remember that it may be difficult to discern exactly how much the health care law is responsible for a greater reliance on part-time workers. Goldman Sachs, in a research report this month, cautioned that “while it is possible that the trends over the last few months might reflect the approaching onset of the now-delayed employer mandate, it is also important to note that the shift toward part-time labor pre-dates enactment of the health law and is much more clearly associated with the economic downturn.”

Readers also may find of interest a long blog post on this subject by Jared Bernstein, a former aide to Vice President Biden. Not surprisingly, he argues that it is a mistake to judge the health care law by its impact on job creation, since that was not the central purpose of the law in the first place. But he acknowledges that if “the ACA has the unintended consequence of notably hurting job creation, policy makers will need to quickly take action to try to correct that problem.”

As we said, we tend not to take sides in economic disputes. But we are curious to hear what readers think of the administration’s case. Feel free to provide links to studies (not newspaper articles) that you think undercuts it.

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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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