Obamacare and Employment

If you listen to CNBC or read right wing blogs you would think that the Obamacare regulations that require  large employers — over 50 full time equivalent employees –to provide their employees insurance or pay a penalty is leading to a massive shifting of employees from full time to part time.  CNBC is constantly interviewing business owners who say they are shifting time workers from full time  to part time.  It makes for a logical argument, but the data does not support it.  So far this cycle part time employment is growing slower than full time employment so  part time employees share of employment is falling.  Part time share of employment seems to be following a normal cyclical development of surging during recession and declining during the recovery.   At a minimum this ratio says that shift full time employees to part time employees is not large enough to show up in the  the data.

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Another way to look at the issue is to look at the average workweek.  The average workweek is impacted by two types of changes.  One, is employment growth in different industries with different work practices.  For example, manufacturing uses very little part time labor and the average workweek is actually over 40 hours.  While retail has long used part time labor extensively and the average workweek in retail is now only 30.1 hours.  If manufacturing employment is growing faster than retail employment

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the average workweek will tend to lengthen.  But it will shorten if retail employment is growing faster than manufacturing employment. What we have this cycle is that employment in these two industries appear to be in balance, and so generating a flat workweek.

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This is the factor that accounts for most of the long term secular decline in the average workweek.  But interestingly, the average workweek has been amazingly stable over the past year, not at all what you would expect if Obama care was causing employers to shift their employes from full time to part time work.

The other way the average workweek would change if some industry is changing its practices and shifting employment from full time to part time work.  The BLS publishes detailed data on the workweek for 13 different industries.  Over the past year only 3 of the 13 industries have experienced a drop in the average workweek while the workweek lengthened for 10 industries. In the table goods producing and service producing are sub categories, not individual industries.

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So, on balance it seems we have another example of the right wing developing another beautiful theory that is strongly contradicted by the data.  Why am I not surprised?

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