OBAMACARE’S EMPLOYER mandate requires firms that employ 50 or more people to pay for group coverage of employees who work at least 30 hours a week. Republicans have long criticized this as a de facto tax that will drive companies to reduce hours for part-timers; that is, those who can least afford the lost income. So there was a bit of an uproar when Buzzfeed reported that part-time employees of Staples, the office-supply chain, believe that the company is strictly enforcing a post-Obamacare rule against any part-timer putting in more than 25 hours per week.
Republicans cried vindication, while President Obama, in an interview with Buzzfeed, spun the story as an example of Staples’s corporate perfidy, saying of the firm’s executives: “Shame on them.” For its part, Staples said it was much ado about a corporate policy that actually predated the Obamacare mandate.
The situation illustrates three iron laws of policymaking in Washington. Iron Law No. 1: Incentives influence behavior. It would be amazing indeed if employers did not respond to a rule like the employer mandate by minimizing the number of workers putting in more than 30 hours, consistent with the rest of their business models. This is one reason that the Congressional Budget Office last year predicted a very modest decline in labor supply because of Obamacare.
The available data support that forecast, according to a study by Ben Casselman of FiveThirtyEight . In 2009, 9.7 percent of part-timers worked between 25 hours and 29 hours and 7.7 percent worked between 31 and 34 hours. In about mid-2013, just before the employer mandate’s original implementation date, the gap between those numbers began to widen, hitting 11.1 percent and 6.6 percent, respectively, by year’s end.
That brings us to Iron Law No. 2: All policy changes create winners and losers. If some part-timers lost hours, other members of the labor force probably benefited: Specifically, workers formerly locked in to full-time jobs by their need for employer-provided health insurance have been freed to find other employment situations that better suit their families’ needs, since they can get coverage on new exchanges. In other words, their overall welfare improved, even as their work and wages may have declined.
Now for Iron Law No. 3: American politicians do not openly and honestly discuss policy trade-offs. There is no denying that Obamacare may inflict losses on some number of low-wage, part-time workers. Mr. Obama’s attempt to shame Staples was, in that respect, demagogic. Yet contrary to GOP propaganda, the magnitude of those losses, in the context of an economy with 150 million workers, is almost certainly very small and can’t be fairly assessed without acknowledging the benefits Obamacare confers on other workers.
Certainly, any GOP alternative to Obamacare that might be in the works will include its own set of costs and benefits, with disparate impact on various groups, just as the pre-Obamacare status quo did. When it comes to fixing health care’s inefficiencies and inequities, nobody’s got an “Easy” button; it would be nice if politicians would stop pretending otherwise.