- Sep 19, 2011
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Employers are cutting employee hours because of Obamacare forces employers to pay a penalty!
That simple.
However, many economists agree that one of the direct impacts of this new legislation is more part-time jobs and reduced hours for workers.
You see, under the employer mandate of Obamacare, businesses employing 50 or more workers will be forced to offer health insurance or pay a penalty of $2,000 per full-time worker (i.e., those working over 30 hours per week).
The simple way to get around this penalty is obviously to reduce each employee's hours, but offset that by hiring more workers.
"Our analysis of a similar program in Massachusetts suggested that this law could slow job growth in the United States," wrote UBS's Drew Matus in a June research note. "Given the impact on Massachusetts, we could see a reduction in job growth of almost 500,000 during the first few years of the act’s implementation. Alternatively, we could see more hiring driven by part-timers not eligible for health insurance (which could increase hiring) with a commensurate decline in the average workweek."
BEFORE the recession, Richard Clark’s cleaning company in Florida had 200 employees, about half of them working full time.
These days it has about 150, with 80% part-time. The downturn explains some of this.
But Mr Clark also blames Barack Obama’s health reform...
Mr Clark says he is "very careful with the threshold". To keep his full-time workforce below the magic number of 50, he is relying more on part-timers. He is not alone. More than one in ten firms surveyed by Mercer, a consultancy--and one in five retail and hospitality companies--say they will cut workers’ hours because of Obamacare. A hundred part-timers can flip as many burgers as 50 full-timers, and the former will soon be much cheaper.
Here's What Economists Are Saying About The Claim That Obamacare Is Causing More Jobs To Be Part Time
That simple.
However, many economists agree that one of the direct impacts of this new legislation is more part-time jobs and reduced hours for workers.
You see, under the employer mandate of Obamacare, businesses employing 50 or more workers will be forced to offer health insurance or pay a penalty of $2,000 per full-time worker (i.e., those working over 30 hours per week).
The simple way to get around this penalty is obviously to reduce each employee's hours, but offset that by hiring more workers.
"Our analysis of a similar program in Massachusetts suggested that this law could slow job growth in the United States," wrote UBS's Drew Matus in a June research note. "Given the impact on Massachusetts, we could see a reduction in job growth of almost 500,000 during the first few years of the act’s implementation. Alternatively, we could see more hiring driven by part-timers not eligible for health insurance (which could increase hiring) with a commensurate decline in the average workweek."
BEFORE the recession, Richard Clark’s cleaning company in Florida had 200 employees, about half of them working full time.
These days it has about 150, with 80% part-time. The downturn explains some of this.
But Mr Clark also blames Barack Obama’s health reform...
Mr Clark says he is "very careful with the threshold". To keep his full-time workforce below the magic number of 50, he is relying more on part-timers. He is not alone. More than one in ten firms surveyed by Mercer, a consultancy--and one in five retail and hospitality companies--say they will cut workers’ hours because of Obamacare. A hundred part-timers can flip as many burgers as 50 full-timers, and the former will soon be much cheaper.
Here's What Economists Are Saying About The Claim That Obamacare Is Causing More Jobs To Be Part Time