Thursday, July 25, 2013

Obamacare and the move to Part Time Work. Will we let Business get away with hurting us through wage reductions?

(NOTE: Everything in this post would be unnecessary if we had a much cheaper, single payer health care system system in place, than contorting into a pretzel to accommodate insurance companies.) 

My conservative friend in Milwaukee often lays into me about the "fact" that Obamacare is forcing employers to turn everyone into part time workers, as a way to avoid health care reform. This is my answer to that.

The trend is something I've written about here before; businesses are working under a new model since the Great Recession. They have moved to having a static number of full time employees, and hire part time workers only when demand calls for it. As the Washington Post's fact checkers found:
Over the past 12 months (year ending June 2013), 116,000 additional workers per month were in full-time jobs, while just 16,000 additional workers per month were in part-time jobs.

According to the BLS Household Survey, 85 percent of the gain in employed workers since June 2009 is due to additional full-time positions. And since Obamacare passed in March 2010, over 90 percent of the gain in employment is due to additional full-time positions.

According to the BLS establishment survey, the average workweek has risen 0.7 hours since the recession ended in June 2009. Moreover, at 33.7 hours, the average workweek has essentially returned to its level at the start of the Great Recession. These developments would not have occurred if employers had cut back on their workers’ hours during the current recovery.
Long Term Consequences: Employers are forcing part time workers who many times work longer than 30 hours a week, to work no more than 30 hours. That's a cut in pay. That wipes out that persons discretionary money to be a good consumer, which affects jobs and a companies ability to stay in business. That should be a concern to businesses shouldn't it? I say in the long term they will get hit hard with the reality of their temporary temper tantrum and flawed justification for cutting their own throats and employees pay. Take this story about Trig Supermarkets in northern Wisconsin. The locals should wonder what kind of community, small town business would screw them over like this. But the public has bought into the idea business can do any lousy thing it wants and get away with it:

WJFW: If Trig's Supermarkets hadn't cut part-time work hours, it would have been out of business within a year. That's what a consultant told the company. About two-thirds of the 1,100 Trig's employees are part-time workers. But if they work more than 30 hours a week, the president's health care legislation technically considers them full time. That means Trig's would be forced to provide health insurance to those workers. "It would have put us out of business. Within a year, it would have put us out of business. There's no doubt about that," says Angie Dreifuerst, Trig's' Vice President of HR, Benefits, and MIS. Those changes include promoting a few workers to full time.

But the biggest impact comes to the 65 percent of employees … not allowed to work more than 30 hours per week. "Yeah, they were frustrated … I said, 'this isn't good for you, this isn't good for us, it's not what we want to do either.' Unfortunately, we don't have a lot of options." Even school districts like Minocqua-Hazelhurst-Lake Tomahawk have taken steps to make sure their part-time workers stay under the 30 hour threshold. 
My Long Term Solution: What I'm not seeing from employers are raises to make up for their part time employees lost income when they move to 30 hour weeks. According to the numbers above, the average hours per week is back at 33.7 hours. Wouldn't that be a good starting point to adjust part time wages higher. Doesn't that makes sense? The move is already on to raise the minimum wage nationally anyway.
Goldman Sachs, in a research report this month, cautioned that “while it is possible that the trends over the last few months might reflect the approaching onset of the now-delayed employer mandate, it is also important to note that the shift toward part-time labor pre-dates enactment of the health law and is much more clearly associated with the economic downturn.”
This doesn't completely absolve Obamacare from what we're seeing as the unintended consequences of the law. Who would have thought companies would retaliate against their workers? But overall, and bad for this nation, is the move to part time work as the new business model:
NY Times: A revised definition of part-time employment may have some popular appeal … Two senators, Joe Donnelly, Democrat of Indiana, and Susan Collins, Republican of Maine, are proposing to tweak the Affordable Care Act by changing the definition of part-time work to include any work schedule of 39 hours a week or less. They say the change conforms with traditional definitions of full-time work and will prevent workers from having their work schedules cut. Although it may be true that their proposal would prevent cuts in hours for those now working, say, 35 hours a week, it would be likely to cause cuts for employees working 40 to 45 hours a week, because staying short of the 40-hour threshold would be closer to their current work schedule than staying short of the law’s 30-hour threshold.
Finally this, from the Indiana Evansville Courier Press:
Indiana University-Purdue University at Indianapolis political professor Sheila Kennedy lamented that we romanticize about our nation’s “Norman Rockwell” roots, while employers make moves to deny their part-time employees access to health care coverage. Ivy Tech faculty are being limited to no more than 9 hours per semester until the school can figure out how to compute hours and determine who reaches the 30-hour a week mark and who doesn't.

Kennedy argues that by limiting the hours of part-time employees, these employers aren’t living up to the “Rockwell” image we have of ourselves.


  1. Shop Local used to be important to me, but I have changed that focus in the last six months to Shop Living Wage - patronizing places that provide wages and/or benefits that give workers a fighting chance to support themselves, so I don't have to through my taxes. I try to focus on shopping at places that are known or can prove that they aren't engaging in the kind of nonsense that's starting to happen with Obamacare. I can get decent deals at my local grocery store by using coupons and shopping sales, I don't have to go to WalMart to grocery shop in order to stay in my budget.
    I'm also starting to write the national fast food chains, politely asking them if they are going to allow their franchisees to circumvent the Obamacare regs, pointing out that I would prefer to enjoy food prepared by people who are able to see a doctor when they are ill. I'm using snail mail since I've noticed lots of companies don't respond to email. I'm interested to see what if any responses I receive.

  2. This is such BS and Trig Solberg is a well known Scott Walker supporter. 2/3 of their employees were already part-time so they could avoid paying for health insurance. We the taxpayers pay for it when Trig's employees are forced to go on Badgercare and Foodshare just like all the Walmart employees in Wisconsin. Trig Solberg is another huge corporate welfare "taker."
    I wonder what it would be like if Wisconsin "reporters" and media actually asked a follow up question for a change?

  3. Nice catch. In fact, the WDC database shows that Trig (or Trygve) Solberg has given Walker and other GOPs well over $10,000 in the last 3 years. Maybe Trig's should be investing more in its workers than in buying off politicians.

    What a dishonest scumbag. Glad I didn't go there when I was up North this week. Sounds like Trig's needs the Papa Johns/ Darden restaurants treatment for their lies and abuse of workers.