ObamaCare transforming America into Part-Timer Nation?

posted at 10:41 am on October 9, 2012 by Ed Morrissey

Under ObamaCare, companies of more than 50 workers who do not provide health-insurance coverage have to pay significant fines, although not nearly as costly as the insurance itself.  That alone might have employers bailing out of the health-insurance market, but the Orlando Sentinel reports that at least one company is testing a way to avoid both costs.  Employers do not have to provide health-insurance coverage to part-time workers under ObamaCare as long as they work less than 30 hours a week, and one restaurant company has begun experimenting with changing over entire staffs to part-time work to avoid the ObamaCare mandates and fines (via Instapundit):

In an experiment apparently aimed at keeping down the cost of health-care reform, Orlando-based Darden Restaurants has stopped offering full-time schedules to many hourly workers in at least a few Olive Gardens, Red Lobsters and LongHorn Steakhouses.

Darden said the test is taking place in “a select number” of restaurants in four markets, including Central Florida, but would not give details. The company said there has been no decision made about expanding it. …

Analysts say many other companies, including the White Castle hamburger chain, are considering employing fewer full-timers because of key features of the Affordable Care Act scheduled to go into effect in 2014. Under that law, large companies must provide affordable health insurance to employees working an average of at least 30 hours per week.

If they do not, the companies can face fines of up to $3,000 for each employee who then turns to an exchange — an online marketplace — for insurance.

This is the problem with massive government interventions into markets.  They create perverse incentives, and force participants in markets to look for alternatives to the massive costs of those interventions.  This is one example.  Businesses usually prefer stable labor pools, and full-time status and reasonable benefits usually help provide that kind of stability.  As a hiring manager for years, I can tell you from personal experience that managing a part-time staff creates its own costs and headaches, much of which won’t be felt in the home office of a multiple-location entity like Darden.

However, the costs may not outweigh the savings any longer derived from dumping benefits for workers — and that’s doubly true in a bad job market for workers.  There aren’t too many competitive pressures at the moment to keep Darden and other companies from pursuing this strategy.  It has the benefit of boosting employment numbers, but only among those involuntarily working part time … which, as Mickey Kaus points out, is exactly what the September jobs report showed.

If this turns out to be the trend, what happens then?  Reason predicts that we’ll see even more government intervention to cut off those perverse incentives … which will result in even more perverse incentives:

Of course, politicians will, no doubt, scramble to fix this insidious outcome not of the legislation they passed, but of the errors of the uncaring private sector. And that legislation will, certainly, have no more unintended consequences.

In the meantime, the ObamaCare-driven transformation of America into Part Timer Nation will end up making the lives of workers more miserable rather than less so:

This truly sucks if you’re a worker trying to piece together the paychecks needed to live a decent life. Now you have to scramble to pick up another part-time job, and neither will come with much in the way of benefits. OK, the feds will have some health program for you through the government-mandated exchanges, but goodbye vacation time and any other goodies that come from full-time status, such as manageable schedules.

Having had that experience as a hiring manager, I’m not certain that a move to part-time staffs will succeed for businesses, but it’s going to be mighty tempting for them to at least try it out.  Don’t be surprised to see this expand over the next two years or so, especially in the service industries.


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Policy of deliberate impoverishment. Especially after the HHS edict for the purposes of Obamacare that ‘full time’ shall be anything over 30 hours. Small employers with tight margins will necessarily CUT hours o employees, rather than extend ruinously expensive coverage to low-skill employees.
The whole fabric of the putsch is to cleave our capitalist economy, drive a massive wedge in it, forcing greater numbers into bankruptcy / government dependence.

rayra on October 9, 2012 at 12:37 PM

So then soon the only people who will have full-time jobs will be public and private union employees and then won’t everybody want to be unionized. Slick those libturds are, eh?

Regarding the jobs numbers and all those part-time jobs that so miraculously appeared … Mark Levin asked an interesting question on his show last night–if close to a million new jobs have been created, are the revenues from those jobs showing up in the US Treasury? Income tax, Social Security, Medicare, fed unemployment tax? Has anyone done any research into that? Or were all those part-time jobs, if they really exist, the result of splitting full-time jobs in half or thirds?

stukinIL4now on October 9, 2012 at 12:38 PM

The push back I get here on this subject simply proves that Republicans just do not get it and we are going to get boned again soon. astonerii on October 9, 2012 at 12:26 PM

The push back has more to do with not wanting to come in third in elections for the foreseeable future.

Akzed on October 9, 2012 at 12:39 PM

The push back has more to do with not wanting to come in third in elections for the foreseeable future.

Akzed on October 9, 2012 at 12:39 PM

So lies are the new normal? Blaming others is the new normal? You win on merit, any other form of winning is not going to accomplish positive results.

You cannot come in third when there are only two parties. How about we make an honest one? It might actually get some votes.

astonerii on October 9, 2012 at 12:44 PM

and by the way, my employer recently told me that my flex savings account contributions (pre-tax) will be capped at 1/2 of what I currently use on an annual basis. That’s a back-door tax if I ever saw one. In fact, it’s disguised as an increase in take home pay. That burns me up!

Not only will my premiums go up, but I can not pay for other medical expenses with as many pretax dollars. We’re getting it coming and going.

*spit*

This cr@p sandwich better be repealed on day one!

freedomfirst on October 9, 2012 at 12:49 PM

More part time workers more jobs created!! Pretty soon there will be 1000,000 jobs created but 600,000 people will be counted as employed….oh wait.

jukin3 on October 9, 2012 at 12:49 PM

I am the only full time staff member in a pretty large team of people where I work. I can tell you, people who get part time hours give part time effort. It is a major headache for me to try to get part time people to do their work at all (and since we’re a 24/7 operation, it just can’t wait). I seriously doubt that a strategy of going to part time staff is a good one. I can not for the life of me understand why every business owner in the country doesn’t just go on strike until Obamacare is repealed. Why the **** don’t they ever speak up for themselves?

JoseQuinones on October 9, 2012 at 12:52 PM

and by the way, my employer recently told me that my flex savings account contributions (pre-tax) will be capped at 1/2 of what I currently use on an annual basis. That’s a back-door tax if I ever saw one. In fact, it’s disguised as an increase in take home pay. That burns me up!

Not only will my premiums go up, but I can not pay for other medical expenses with as many pretax dollars. We’re getting it coming and going.

*spit*

This cr@p sandwich better be repealed on day one!

freedomfirst on October 9, 2012 at 12:49 PM

Honestly you should not have anything in pretax dollars. That is part of what causes market distortion. The whole system needs to be revamped, and employers providing health care insurance should not be tax free either. Get all the cash to the employee for their own uses.

astonerii on October 9, 2012 at 12:52 PM

“Forward!”

[spit]

Dirty Creature on October 9, 2012 at 12:54 PM

Maybe this is their end-round attempt to get us on the French-style 35 hour work week?

besser tot als rot on October 9, 2012 at 1:01 PM

Honestly you should not have anything in pretax dollars. That is part of what causes market distortion. The whole system needs to be revamped, and employers providing health care insurance should not be tax free either. Get all the cash to the employee for their own uses.

astonerii on October 9, 2012 at 12:52 PM

And the only economic reason to put money in pretax dollars is if you think that taxes are going to be going down. Good luck with that with the looming boomer retirement, college graduate unemployment, and all around entitlement armageddon.

besser tot als rot on October 9, 2012 at 1:03 PM

Under ObamaCare, companies of more than 50 workers who do not provide health-insurance coverage have to pay significant fines new taxes, although not nearly as costly as the insurance itself.

fify

Marcola on October 9, 2012 at 1:05 PM

In case anyone is wondering, this is what “SMART Power” looks like.

jukin3 on October 9, 2012 at 1:07 PM

This is the problem with massive government interventions into markets.

Just like the ‘well-intentioned’ minimum wage laws, which turn out to be racist in keeping many minority youths with no job skills from getting ANY job, part-time or not.

I put well-intentioned in scare quotes, because there’s always a chance SOMEone’s intentions were and still are not good.

Marcola on October 9, 2012 at 1:08 PM

Employers do not have to provide health-insurance coverage to part-time workers under ObamaCare as long as they work less than 30 hours a week…

Well, THAT’S fixable! I can see an EO on the first day of Captain EO’s second term: remove the hours per week limitation, ALL employees get health care!

Let’s see what THAT does to unemployment!

Marcola on October 9, 2012 at 1:12 PM

Just like the ‘well-intentioned’ minimum wage laws, which turn out to be racist in keeping many minority youths with no job skills from getting ANY job, part-time or not.

I put well-intentioned in scare quotes, because there’s always a chance SOMEone’s intentions were and still are not good.

Marcola on October 9, 2012 at 1:08 PM

No, the part that discriminates against minorities is the education of and home culture they grow up in. Minimum wage laws effect every racial group the same. Minimum wage laws discriminate against low experience and the disabled, making their labor illegal.

astonerii on October 9, 2012 at 1:13 PM

Get all the cash to the employee for their own uses.
astonerii on October 9, 2012 at 12:52 PM

The current big-government regime vehemently disagrees with you. “The average employee isn’t smart enough to know what’s good for them, and predatory Rmoney types will take advantage of them leaving them with nothing.”

Even if Romney defeats Obama, this “we have to take care of you and protect you because you can’t” mindset will still be entrenched at all levels of government and education and media.

Marcola on October 9, 2012 at 1:17 PM

And the only economic reason to put money in pretax dollars is if you think that taxes are going to be going down. Good luck with that with the looming boomer retirement, college graduate unemployment, and all around entitlement armageddon.

besser tot als rot on October 9, 2012 at 1:03 PM

Not fully understanding the first part of your argument?

I agree that the boomers are screwing us royally. The over spent by trillions of dollars, then demanded government make them whole for their stock market and home value losses for trillions more. Aborted us by the tens of millions, family planned hundreds of millions more out of existence, miseducated us, propagandized us to the point that 52% of those few who voted put Obama into power. Yup, gotta love the boomers. No tax cuts in the horizon.

But then again, 50% of the population uses all of 5% of medical care dollars in this nation. Somehow, I think they could get a much better deal paying taxes on that money, getting a high deductible plan, put the some money into a health care savings account and pocket the rest.

1% uses 20%, 5% use 49%, 20% use 80% of the health care dollar. Basically, when you are born, you use many dollars of care, when you get really old you use quite a bit of care for chronic issues. But if someone else is paying the bill, you are way more likely to go in for minor chronic things more frequently. Particularly if you are old and refused to have children and thus are lonely!

High deductible, with a savings account to pay for your high cost old age chronic care. Have a family to back you up in your old age.

Do I feel sorry for old people? NOPE, I do not. It is not like cancer that sneaks up on you. You know your getting older, have a plan and leave me out of it unless your related to me.

astonerii on October 9, 2012 at 1:28 PM

Marcola on October 9, 2012 at 1:17 PM

Well, fight against them and educate people! It is the only way to get from here to constitutional again. Either that or a huge crash that makes it impossible for the government to continue doing it. Then it is up for grabs which way we go. Back to republican government or to tyranny.

astonerii on October 9, 2012 at 1:29 PM

And don’t forget the other way Obama is promoting part-time employment: leading by example!

SacredFire on October 9, 2012 at 2:26 PM

Honestly you should not have anything in pretax dollars. That is part of what causes market distortion. The whole system needs to be revamped, and employers providing health care insurance should not be tax free either. Get all the cash to the employee for their own uses.

astonerii on October 9, 2012 at 12:52 PM

I’m a bit busy today….but I agree with the market distortion comment and the need to revamp. I don’t think employers should be providing health insurance. They should be paying fair value for the job and employees should be able to hit the market for health insurance as they see fit (see what I did there…no requirement for health insurance).

However, under the existing “rules”, I’m making what I believe to be a rational decision to maximize my contribution to flex spending account because my family’s med bills have been enough to exhaust those pretax dollars. So, I’ve not been paying taxes on that $5,000. Am I acting irrationally?

You and besser tot als rot are making me question my choices.

freedomfirst on October 9, 2012 at 2:45 PM

I expect an explosion in LLCs. Large companies will break up into hundreds of small companies each less than 50 employees.

BobMbx on October 9, 2012 at 2:50 PM

freedomfirst on October 9, 2012 at 2:45 PM

I am sorry, Not meant to make you go against your best interest with respect to what is existing. That is not my intention.

I am just going for the educational aspect so that hopefully more people will be willing to move at some point in time to a better and more natural system that is more efficient in many aspects.

astonerii on October 9, 2012 at 3:00 PM

astonerii on October 9, 2012 at 3:00 PM

Thanks. Agreed.
Withholding my longwinded followup because this thread seems to have run its course.

freedomfirst on October 9, 2012 at 3:26 PM

Hawaii has had a Prepaid Health Care Act since 1974 where full-time employees are entitled (I think) to being provided with health care insurance. Part-timers (typically 19.5 hours a week) do not get this automatic coverage.

I think one can say that requiring the provision of health care is great if and only if one gets a job (full time).

So someone was going to try and thread the rules/laws/regulations is inevitable, because they look for some optimal (and legal) solution to a costly problem.

Russ808 on October 9, 2012 at 3:42 PM

But hey, its all tedious, and hey, we can blame other people, no need to look at our own failures and learn from them, it is not like bad things repeat or anything. In Vegas, Romney outlines plan to ‘reignite the housing economy’

astonerii on October 9, 2012 at 12:23 PM

and

Withholding my longwinded followup because this thread seems to have run its course.

freedomfirst on October 9, 2012 at 3:26 PM

The only thing I get out of your comments is they are all the same to you but only one side deserves criticism. Who you votin’ for A Stoner Is I?

DanMan on October 9, 2012 at 3:56 PM

DethMetalCookieMonst on October 9, 2012 at 11:21 AM

Heh. I thought the exact same thing. I was hoping beyond hope that Ed would somehow have mentioned her in the course of his excellent article.

kekelaward on October 9, 2012 at 4:00 PM

You know your getting older, have a plan and leave me out of it unless your related to me.

astonerii on October 9, 2012 at 1:28 PM

For the past 50 years, I’ve been told I had a plan. Now I’m being told I don’t.

5-6 years is not enough time to “re-adjust” my retirement plan. I find it hilarious that I continue to receive my annual “SSA Benefits” letter every year, showing my how much my SSA check will be.

pssst…..its from the gubbamint, it must be true.

BobMbx on October 9, 2012 at 4:02 PM

With many businesses looking to make less money in the foreseeable future, and with the open sieve to the south we nostalgically call a “border”, of course they are less likely to hire full time workers.

Hiring folks to work just under 40 hours a week to avoid paying full (or any) benefits is nothing new.

Obviously, the Obamacare scam will certainly exacerbate what has long been and is increasingly a dire situation for American workers. I think we’ll see this happening more in even skilled labor areas, especially if these Chinese economic zones start taking hold in the States.

Need your ___ repaired? Get the Chinese guy to do it-he’ll charge a fraction of what Bubba will, most of the money goes to the Central Committee in Beijing and said Chinese guy will be ecstatic because he’s living waaaay better than he can do back home.

Dr. ZhivBlago on October 9, 2012 at 4:10 PM

This practice isn’t new. I’ve worked in a couple restaurants in my younger days and they only had a few full time employees. Even some of the managers were part time (just below cutoff) so they didn’t have to pay them benefits. Those EVILLLL, capitalists!

Part time job is better than no job. They should be grateful they have a job in this economy rather than whining about it being part time.

nazo311 on October 9, 2012 at 4:16 PM

The only thing I get out of your comments is they are all the same to you but only one side deserves criticism. Who you votin’ for A Stoner Is I?

DanMan on October 9, 2012 at 3:56 PM

No one. I am protest voting against Obama. Romney gets the benefit of not being Obama.

Unless we hold them to account, they will not do what is in our interest. They will only do what is in their interest.

astonerii on October 9, 2012 at 4:17 PM

For the past 50 years, I’ve been told I had a plan. Now I’m being told I don’t.

5-6 years is not enough time to “re-adjust” my retirement plan. I find it hilarious that I continue to receive my annual “SSA Benefits” letter every year, showing my how much my SSA check will be.

pssst…..its from the gubbamint, it must be true.

BobMbx on October 9, 2012 at 4:02 PM

Your closer to retirement than me. I understand the argument about what government told you. You still do have a plan. Unfortunately. It is not likely to change. The only thing that changes is who pays for it. 15.2% is not enough of my baby’s future wealth to be stolen. It will be going up and up and up just to pay for baby boomers. If I was a baby boomer, I would say the same thing I am saying now. I’m an equal opportunity offender.

I get the same letter you do. Thousands of dollars a month for me if I become disabled or retire at age XX. When I fill out the retirement planner. I turn off include social security.
According to it, I can retire at my current rate of savings around age 83 and have money to last until age 120. Living modestly on things I purchased outright and take care of. Man, if I would have started saving this way back when I was 22 fresh out of the Marines, I could retire, well, much much earlier.

astonerii on October 9, 2012 at 4:27 PM

Its okay, this administration will just count them as full time posititons to help lower the real unemployment numbers.

woodNfish on October 9, 2012 at 8:42 PM

DUH!

The places won’t even let their wait staff hit OT to avoid paying the extra $2 an hour for time and a half on $4 in wages. Everyone will just be cut to less than 30 hours.

jhffmn on October 9, 2012 at 10:41 PM

Changing the status of workers from full time to part time will also destroy morale and any respect for any employer that does pushes full time workers to part time.

hamradio on October 9, 2012 at 11:41 PM

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