Obamacare May Be Causing A Shift To Part-Time Workers In Illinois

Feb 24 2014, 5:33pm CST | by

Obamacare May Be Causing A Shift To Part-Time Workers In Illinois
Photo Credit: Forbes Business

By Naomi Lopez Bauman

The Obama administration announced last week another one-year delay of the Affordable Care Act’s employer mandate for some firms. This comes on the heels of the Congressional Budget Office’s “The Budget and Economic Outlook: 2014 to 2024,” which contains the now infamous analysis that the ACA will reduce work by a full-time equivalent of 2.5 million jobs by 2024.

There is, however, mounting evidence that employers already have been cutting employees’ hours in the low-wage employment sectors. This trend has been observed in Illinois, and among the very populations that can least afford to bear these cuts, which is why the partial delay is welcome news in the president’s home state.

In Illinois, three employment sectors fall into both the lowest-paid and lowest work hours categories: retail trade, food and beverage, and general merchandise. They comprise about one-fifth of the state’s total employment. Of these three sectors, all three have average work hours of less than 30 hours per week. The law’s threshold for full-time is 30 hours.

Between 2011 and 2013, Illinois has lost the equivalent of about 63,000 jobs in these sectors through reduced work hours. That is close to the total number of jobs added in all sectors in the state during the past year.

It is important to note that, before ObamaCare was passed, the average work hours remained steady for these sectors in Illinois, even in the aftermath of the financial crisis. In fact, average work hours increased slightly in two of these sectors between 2008 and 2010. But all three sectors saw dramatic reductions in average work hours after ObamaCare was enacted.

Illinois is far from a unique example. This disturbing trend is becoming more apparent nationally, as well.

Retail employment, which makes up almost one-tenth of the nation’s total nonfarm employment, is seeing similar reductions. In 12 of the 14 states including Illinois where average weekly hours worked are available, non-supervisor workers in the retail trade showed average annual declines in hours worked between 2011 and 2013. In fact, six states saw average hours worked fall to 30 hours or below for that sector. One state had no change in hours and one saw an increase.

Taken together, these states represent one-quarter of the nation’s retail sector. While some of these states did see employment gains, the net loss of equivalent jobs was about 1 percent of the sector’s total employment. While it is difficult to determine the many factors that might be affecting the almost across-the-board cuts in work hours, it is unusual to observe employment growth with a simultaneous reduction in hours.

Thirteen of these states grew in overall retail sector employment during this time period. Why might employers be cutting work hours?

Under the law’s employer mandate, employers with 50 or more full-time employees or full-time equivalents are required to offer “qualified and affordable” health insurance coverage to their employees. This provision of the law was supposed to go into effect Jan. 1, 2014, but was delayed this past summer for one year by the Obama administration and was recently delayed again for another year for those employers with 50-99 full-time or full-time equivalent employees./>/>

The CBO report states that: “there have been anecdotal reports of firms responding to the employer penalty by limiting workers’ hours … In any event, because the employer penalty will not take effect until 2015, the current lack of direct evidence may not be very informative about the ultimate effects of the ACA.” The employer penalty now will not take effect until 2016 for many employers, yet we seem to have amassed a mountain of anecdotes.

At some point these many anecdotes will turn into evidence. The Federal Reserve Bank’s “Beige Book” includes comments from businesses in all 12 of the Federal Reserve Bank districts. The document, issued eight times annually, summarizes comments from businesses. While it does not reflect the Federal Reserve’s official view, it does provide insights into economic conditions across the nation. Business contacts, economists and analysts frequently cite the ACA as having a dampening impact on business hiring, spending and overall uncertainty.

The rollout of the president’s signature legislation has been a calamity, as it further threatens the prospects of the lowest-wage workers in Illinois and across the country. One does not need another anecdote to understand that the further delay of the employer mandate provides a tacit admission of just how destructive the employer mandate likely will be. Rather than allowing the president to unilaterally delay this damaging provision until after the midterm elections, lawmakers should take a swift vote on ending both the employer and individual mandates.

Naomi Lopez Bauman is the director of health policy at the Illinois Policy Institute.

Source: Forbes Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Bhopal fugitive Warren Anderson is dead (Roundup, Changing dateline)
Washington, Oct 31 (IANS) Warren Anderson, the former CEO of Union Carbide Corp, has died at 92 after living for 30 years under the shadow of the 1984 Bhopal gas tragedy that killed thousands.
 
 
Sit-ins delayed building powerhouses: Nawaz Sharif
Islamabad, Oct 31 (IANS) Prime Minister Nawaz Sharif Friday blamed sit-ins for delaying the construction of powerhouses in the country, as cricketer-turned-politician Imran Khan continued protesting with supporters in the capital city for over two months.
 
 
Britain to repay part of First World War debt
London, Oct 31 (IANS) British Chancellor of the Exchequer George Osborne Friday announced that the British government will pay off part of the country's First World War debt as part of the redemption of bonds stretching as far back as the 18th century.
 
 
UN-Habitat presents the first World Cities Day
Shanghai, Oct 31 (IANS/EFE) The UN Human Settlements Programme (UN-Habitat), headed by former Barcelona mayor Joan Clos, Friday launched its first World Cities Day in China, to be held every Oct 31 to promote sustainable development.
 
 
 

Latest from the Network

Ponzy schemer cheats residents of $22 mn, gets 15-year jail
Washington, Oct 31 (IANS) If you have been one of those approached by some 'known' person for investing in something with an assurance of 'easy money', you may benefit reading about this Ponzi schemer jailed in the US...
Read more on Politics Balla
 
Burkina Faso's president quits, army chief takes power (Roundup)
Ouagadougou, Oct 31 (IANS) Burkina Faso's army chief Gen. Nabere Honore Traore assumed power Friday after President Blaise Compaore announced his resignation following violent protests against his attempt to extend...
Read more on Politics Balla
 
Spanish government challenges Catalonia's symbolic vote on independence
Madrid, Oct 31 (IANS/EFE) Spain's government Friday challenged Catalonia's decision to hold a symbolic vote Nov 9 as an alternative to a referendum on independence stalled by the Constitutional Court. The government...
Read more on Politics Balla
 
Myanmar roundtable summit discusses political issues
Nay Pyi Taw, Oct 31 (IANS) Myanmar's first five-party roundtable summit held in the Presidential Palace here Friday discussed some key political issues in the country, presidential spokesman U Ye Htut said at a press...
Read more on Politics Balla
 
Jake Gyllenhaal saves outrageous clothes for Halloween
Jake Gyllenhaal always wears his ''sl***iest outfit'' every Halloween. The 33-year-old actor has revealed his dad, director Stephen Gyllenhaal, is ''obsessed'' with Halloween and throughout his childhood Jake and his...
Read more on Celebrity Balla
 
Katie Holmes would tell her younger self to 'relax'
Katie Holmes would tell her younger self to ''relax''. The 35-year-old actress, who has eight-year-old daughter Suri with ex-husband Tom Cruise, claims she never believed she could carve out a career in Hollywood while...
Read more on Celebrity Balla
 
Joshua Jackson calls Diane Kruger his wife
Joshua Jackson calls Diane Kruger his wife. The 'Affair' star, who previously admitted he and his German girlfriend of eight years are unlikely to ever marry, doesn't like referring to the blonde beauty as his...
Read more on Celebrity Balla
 
Paris Hilton dresses up as her dog for Halloween
Paris Hilton dressed up as her Pomeranian pooch for her Halloween party last night (30.10.14). The 33-year-old star sported a fluffy white minidress and matching headgear, which looked like the fur of her $13,000 puppy...
Read more on Celebrity Balla
 
Saudi Arabia facing high child sex abuse: Studies
Riyadh, Oct 31 (IANS) Some studies in Saudi Arabia have revealed that the rate of children's sexual abuse in the Kingdom is alarmingly high with every fourth child having been exposed to sexual harassment at some point...
Read more on Celebrity Balla
 
30 killed in Nigeria car bomb attack
Nairobi, Oct 31 (EFE) At least 30 people were killed Friday when a car bomb exploded in a crowded bus station in the northeastern Nigerian state of Gombe, the National Emergency Management Agency (NEMA) told media....
Read more on Politics Balla