Some (lonely) facts about Obamacare and part-time work

March 19th, 2015 at 4:42 pm

In a debate on the (great) Diane Rehm show yesterday (around minute 43 of the broadcast), the argument was made that Obamacare was leading employers to move full-time workers onto part-time schedules to avoid the employer mandate. I pointed out that this is inconsistent with the evidence shown below, i.e., the fall in the number of involuntary part-time workers since the Affordable Care Act has been in place.

If Obamacare were pushing people into part-time work, we would expect an increase in involuntary part-time work (part-timers who want to work full time) and a decline in voluntary part-time work. The figure shows both measures, indexed to 100 at the beginning of 2012. As you see, the opposite has occurred: involuntary part-timers are down sharply, by 20% over the past few years while voluntary part-timers are up by about 5%. In fact, since the employer mandate began to phase in starting this year, the decline in involuntary part-timers has accelerated, again, contrary to the prediction by the ACA repealers.

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Source: BLS

As I stressed in the back-and-forth, such an incentive exists in the law, and so you have to look at the data to see if and how it’s playing out. And this is an admittedly aggregate look–as the job market has notably improved and labor demand has strengthened, we’d expect the stock of involuntary part-timers to fall. But then you can’t claim Obamacare is killing the job market if the job market is getting better at a faster pace now, can you?

BTW, one reason why this result should not surprise you is that the set of workers vulnerable to the negative incentive is actually quite small. My colleague Paul Van de Water points out that “only about 7 percent of employees work 30 to 34 hours a week (and thus would be easiest for employers to shift below 30 hours).  Moreover, less than one-half of 1 percent of employees work 30 to 34 hours a week and are employed by businesses affected by the employer mandate and do not have insurance.”

I recently wrote about the serious problem in US economic debates where those with non-credible arguments hold far too much sway in some of our most important debates. This is increasingly the case in particular with Obamacare. As journalist Jonathan Weisman commented after this exchange wherein my opponent wouldn’t back down, facts just don’t seem to be winning the day on this issue. People know what they know, and they don’t want to be bothered with any of your damn evidence!

If the program continues to increase affordable coverage and hold down the growth of health costs, I expect that to change, though that outcome depends non-trivially on a SCOTUS with a number of judges who make me nail-bitingly nervous.

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9 comments in reply to "Some (lonely) facts about Obamacare and part-time work"

  1. Jill SH says:

    A bit more on the employer mandate/part time workers: Prior to ACA, an employer would only have to offer health care benefits to full time employees. (Or at least that’s the way it was here is NH.) So it’s conceivable that a company could staff most of its workforce with part-timers, avoiding health care responsibilities, while having a few select full-timers who would be eligible, probably management level, and higher paid.

    Now under the ACA, all those part time jobs count in the employment level the makes health benefits a requirement for a given employer: The total hours worked by part-timers is divided by full-time hours (35?). The resulting number is added to the employer’s number of full-timers, to see if the 50 employees threshold it met. So, as I understand it, the ACA has less incentive for a company to avoid responsibility by making due with part-time jobs.

    And while many part-time workers may be looking for full time work and benefits, there maybe quite a number of people who enjoy working part-time as various jobs, for any number of reasons. Now tho, they have access to affordable health care through the ACA.


    • polymath says:

      I want to emphasize your last point, Jill. The ratio of involuntary part-time work to voluntary will be increased by employer incentives to decrease hours — but some people who used to be “involuntarily” part time because only full-timers got healthcare may now be “voluntarily” part time because they have health care but don’t need or want to work more.

      I’d love to see some of these flows disaggregated.


  2. Richard Solomon says:

    “Don’t bother me with the facts” kind of thinking has been going on for a number of years now. When it comes to Obama in general and the ACA in particular, it is particularly virulent. The expectation that this will change with more time and more benefits from ACA is a bit naive in my opinion. As long as the naysayers are backed/pushed by a small but wealthy and powerful group of corporations and individuals with their own agendas, they will continue to ignore the facts and continue their efforts to undo the ACA. Fingers are crossed that John Roberts continues to hold onto some rationality amidst all this ideological rhetoric.


  3. John Daschbach says:

    A good set of data. It appears the ACA is increasing personal freedom to choose employment and not increasing involuntary work reduction. Isn’t personal freedom a rallying cry of the right wing? Making health insurance individual and affordable is a significant way to increase employee flexibility and freedom.

    It would be interesting if there was good data on how many people have remained in a job only for the health insurance. Anecdotally my small data sample of friends and family has more than a dozen such cases I know of.


  4. Tcatman says:

    The DR show tries to find knowledgeable people to anchor both sides of an issue. Often they find a PR flac because they have a lot air time to fill and they must have a binary debate. Your panel member was a simple sound bite machine… Her job was to articulate the talking points … certainly not to think critically about data that support those talking points. The tip off…. she repeatedly referenced the gallop poll for her unshakeable version of economic data and reality. There was no mind to influence.

    Sadly, she did her job well… she was impassioned and unshakeable…..She spoke to her faith in a theological battle with you and battled you to a draw as far as her tribe is concerned. …
    You attempted to establish a credible basis of fact by referencing the BLS…. When that foundation could not be agreed on….You swallowed hard and continued the debate as if there was some value. Why?

    Perhaps you should have labeled each of her assertions as a talking point and rejected the gallup poll as a basis of an economic argument….. and made the point that she was simply making a theological rant.


  5. Lewis says:

    My amateur two cents:

    I have no problem believing Obamacare is being used as a bugaboo to cover up anti-labor policies, or to block government healthcare. I agree with Paul Krugman that it’s a corrupt and deceitful system. Teachers are fired for unionizing, contracts are hired out as political favors. By the same token, I have heard of companies firing people for their health insurance. My local newspaper a few years back was in that corporate mentality of slashing everything to pieces to impress the investors. They demanded impossible physical tasks of one of their disabled writers, Zay Smith. He couldn’t perform them, so they fired him. Logically, I think the fact that this was going on before the ACA supports your doubts. Because this practice has always been going on, the anecdotes are going to correlate to any policy, even if the data won’t.

    This leads me to two questions:
    Why don’t we look at hires? If companies are willing to fire workers who have health insurance, doesn’t it follow they’d try to hire people ONLY interested in part-time work? Does this show up in the data?

    Why should we assume that people who work longer hours aren’t also shifted down, especially if there’s an incentive? To leave this out gives your analysis a feel of bluster, at least to a layman.


  6. Lewis says:

    My amateur two cents:

    I have no problem believing Obamacare is being used as a bugaboo to cover up anti-labor policies, or to block government healthcare. I agree with Paul Krugman that Republicans promote a corrupt and deceitful system. Teachers are fired for unionizing, contracts are hired out as political favors. By the same token, I have heard of companies firing people for their health insurance. My local newspaper a few years back was in that corporate mentality of slashing everything to pieces to impress the investors. They demanded impossible physical tasks of one of their disabled writers, Zay Smith. He couldn’t perform them, so they fired him. Logically, I think the fact that this was going on before the ACA supports your doubts. Because this practice has always been going on, the anecdotes are going to correlate to any policy, even if the data won’t.

    This leads me to two questions:
    Why don’t we look at hires? If companies are willing to fire workers who have health insurance, doesn’t it follow they’d try to hire people ONLY interested in part-time work? Does this show up in the data? Does it have bearing on your doubts, or the anti-government side?

    Why should we assume that people who work longer hours aren’t also shifted down, especially if there’s an incentive? To leave this out gives your analysis a feel of bluster, at least to a layman.


  7. Bill says:

    My frustration with Diane Rehm’s show, like many such news/discussion shows, is that they seek to present “balance” in the name of “civil discourse” without regard for whether or not the information being presented is factual. If someone tries to point out that one of the guests is a hack who is reciting false talking points, well that’s not civil, and won’t be allowed. This gives an unfair advantage to the hack by giving hackery the same weight as well-sourced, well-considered information. There might be some legitimate arguments to be made for conservative fiscal policy. But it’s been a long time since I’ve heard anyone making them. I enjoy listening to you on the DR Show, but you must have the patience of Job to continue to go on knowing that those you debate will never be fact-checked by the host.


  8. Aaron says:

    This all sounds good, but go try and find a FULL TIME job as a millennial or x-gen. Extremely difficult. Banks, grocery, pet stores, retailers…they all cut hours to 30 or less.
    Sure, employment is level, but having 3 part time jobs is not the same as a full time job. This data glosses over the reality. From California to Nevada to Wyoming, the problem is the same. Talk with people, you’ll find the same problem. Not in government statistics, but real people on the ground trying to find real work.
    Good luck in finding a full-time job. In Southern California, if you’re under 30, good luck in finding a part time job that leads to full time work. The part time job market is saturated, but that type of work always keeps you dependent.
    Plenty of employers I know have done just that, in multiple states – cut all workers to 30 hours or less. It’s a no brainer. Of course they’ll do it and it’s happened. Every company in the town has done just that.
    Every under 30 person has had a rough time finding full time work. Why – the part time market has saturated. What would cause part time work to saturate, instead of keeping people at full time. Fewer employees used to be cheaper, as the head count is less. Yet, that’s not the case any more. Why could that be?
    Look at statistics all you like, but does someone working 4 jobs at 10 hours a week count as “employed”? Technically, yes. According to the above, you’re technically working. But you have to manage 4 jobs to make up for the 1 lost real full time job.
    Sorry, but all the articles about the ACA don’t talk about full time jobs, they just say someone is earning some money and counting that as employed.
    The gap is unbridgeable


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