Economists are slowly, belatedly noticing how Obamacare will shift the U.S. labor force toward part-time work, something I have been writing about for a few years.\u00a0 The obvious avenue is the 50\/30 rule–employers must provide insurance if they employ 50 or more \u201cfull-time\u201d (more than 30 hours per week) workers.\u00a0 This has two effects. Small businesses may try to stay small by having fewer than 50 workers, and big companies will try to minimize the number of full-time workers by keeping employees\u2018 hours per week to less than 30.<\/p>\n
A slightly less obvious path to a part-time workforce was highlighted in this week\u2019s Barrons<\/b> by the always interesting Gene Epstein.\u00a0 In an article titled \u201cThe New Tilt Toward Part-Time,\u201d Epstein cites a study by Casey Mulligan of the University of Chicago, who argues that Obamacare will encourage part-time employment because part-time workers can get as much as $17,000 per year in Obamacare subsidies.\u00a0 In the old days people worked full-time in order to \u201cget the benefits.\u201d\u00a0 That is no longer necessary.\u00a0 I can work part-time, have more leisure, spend less money on work expenses and child-care, and get heavily subsidized benefits from Uncle Sam.<\/p>\n
What are the implications of a part-time American?\u00a0 It will make for a less dynamic economy because people will work less; the U.S. will be more like France or Italy and less like the U.S. of the 1990s. In the current period of high unemployment this may not seem important, but in the long run it will matter because labor force growth is set to slow dramatically as baby boomers retire.\u00a0 Obamacare will make the slowdown in hours worked even more pronounced.\u00a0 (Enlightened immigration policies that attract well-qualified workers would alleviate this problem.)<\/p>\n
Second, there will be greater inequality as we develop even more of a \u201ctwo tier\u201d workforce.\u00a0 At the top will be highly educated go-getters who are still working sixty hours per week, getting decent salaries and benefits, and accumulating capital that generates investment income.\u00a0 But there will be many more people working part-time, with comparatively low incomes but quite a bit of leisure time.\u00a0 Call them the comfortably impecunious.<\/p>\n
A third impact will be reduced social mobility; poor people will be more likely to stay poor because they cannot get full-time jobs and move up in the organization.\u00a0 When I was in college more than a few years ago I travelled to the West Coast one summer to stay with a relative in a bungalow on LA\u2019s Venice Beach.\u00a0 After just a few difficult days I get a decent job at a Bob\u2019s Big Boy working as a cook eight hours per day, six days a week, at a fair starting wage ($2.50 per hour plus unlimited Big Boy Double-Deck Cheeseburgers).\u00a0 \u00a0Starting in 2015 (Obama granted himself a waver until after the 2014 election), that may be impossible; to get 48 hours you will need\u00a0 to shuttle between two jobs, wasting time and money in the process.<\/p>\n
A more subtle barrier to social mobility is that low-status hourly employees who work less than 30 hours per week will have a hard time moving up in the organization. If they get a promotion to a more responsible, full-time job, their cost to the employer will jump because he or she will be obliged to provide Obama-style gold-plated health insurance.<\/p>\n
When Obama was campaigning for the Presidency, a conservative joked that his campaign slogan should be, \u201cTogether, we can become France.\u201d\u00a0 Alas, that was prophetic.\u00a0 By the way, French unemployment averaged 8.9% over the past decade; the lowest annual figure was 7.4%.<\/p>\n
Copyright Thomas Doerflinger 2013.\u00a0 All Rights Reseerved.<\/p>\n","protected":false},"excerpt":{"rendered":"
Economists are slowly, belatedly noticing how Obamacare will shift the U.S. labor force toward part-time work, something I have been writing about for a few years.\u00a0 The obvious avenue is the 50\/30 rule–employers must provide insurance if they employ 50 … Continue reading