Opponents of Obamacare say it will kill jobs, and they specifically say provisions forcing employers to offer health insurance to workers will encourage smaller businesses to cut jobs and cut hours. But a new report finds that, if anything, fewer people are working part-time this year than the year before.
The report, from the left-leaning Center for Economic and Policy Research, says data show companies have not been cutting hours in anticipation of the law. It contradicts business owners who say they’ve already started cutting back.
CEPR researchers found that just 1 million workers, roughly 0.6 percent of the labor force, work between 26-29 hours a week. Two-thirds of them said they did so by choice, not because they were forced to.
“While there may certainly be instances of individual employers carrying through with threats to reduce their employees’ hours to below 30 to avoid the sanctions in the ACA, the numbers are too small to show up in the data,” wrote CEPR's Helene Jorgensen and Dean Baker.
Earlier this month, the Obama administration delayed a requirement that anyone with 50 or more workers offer health insurance to any of them working fulltime. The requirement defines full-time as 30 hours a week or more -- something constructed to make sure that employers didn’t shave a few hours off people’s work weeks to avoid having to provide the coverage.
Critics of the law, known official as the Affordable Care Act (ACA) leapt onto this as further evidence that it isn’t working. The White House said it was merely giving confused employers more time to work out the details of the paperwork that will be required.
But many employers say a delay isn’t enough, and they say they’ll cut both workers and their hours. The state of Virginia already has done so -- it has capped part-time workers’ hours at 29 hours a week. State officials have said it would cost more than $100 million a year to provide them all health coverage.
Restaurants, which employ many part-time and seasonal workers, would be especially affected by the law. Jamie Richardson, a vice president at White Castle System, Inc, said his burger chain already has been affected by fears about the law. “White Castle’s growth has halted,” Richardson told a hearing of the House Subcommittee on Health, Education, Labor and Workforce Tuesday.
“In the five years prior to the health care law, we were opening an average of eight new White Castle restaurants each year. In 2013, we plan to open just two new locations. While other factors have slowed our growth, it is the mounting uncertainty surrounding the health care law that brought us to a standstill.”
Companies such as Whole Foods and Domino’s Pizza have also said they’ll reconsider hiring practices – although , Darden Restaurants, which owns Red Lobster and Olive Garden, changed course on a plan to slash hours for many workers last year after an outcry.
Douglas Holtz-Eakin, president of the right-leaning American Action Forum, predicted matters will only worsen. “The ACA will contribute to slower job growth,” Holtz-Eakin told the hearing.
“The law will lead to a greater reliance on a part-time workforce, as companies will not be mandated to provide health insurance benefits to part-time workers.”
CEPR’s Jorgensen and Baker decided to look at data that might show whether this is happening.
“If this is the case, we should have first begun to see evidence of the impact of ACA in January of 2013, since under the original law employment in 2013 would serve as the basis for assessing penalties in 2014,” they wrote.
“Fortunately, it is possible to test whether employers are actually reducing hours below the 30-hour hreshold. The Current Population Survey (CPS) provides monthly data on workers usual weekly hours. We used the CPS to compare the first four months of 2013 with the first four months of 2012. We looked at the numbers and percent of workers who reported working 26-29 hours a week.”
That's when they discovered that just 1 million people work those limited hours.
“While the sanctions in the ACA may provide some marginal incentive to reduce worker hours below the 30-hour cutoff, other considerations in setting worker hours appear to be far more important.”
More than half of Americans -- 160 million people – currently get their health insurance through an employer. The law is designed to expand that number, and to help more people get health insurance through marketplaces called exchanges in each state.
First published July 24 2013, 9:27 AM