No, Obamacare Hasn’t Shifted Workers to Part-Time
Policy + Politics

No, Obamacare Hasn’t Shifted Workers to Part-Time

REUTERS/Jessica Rinaldi

Early on in Obamacare’s implementation, some major companies warned that they would be forced to cut their employees’ hours, shifting full-time workers to part-time status in order to limit their obligations and costs under the new health care law.

The warnings gained plenty of traction with Obamcare’s staunchest critics, who said the law’s employer mandate, which requires companies with 50 or more employees to provide health coverage for their workers or pay a stiff penalty, would be severely disruptive to businesses and the workforce.

Related: Health Care Spending Is Expected to Climb Next Year

A new analysis by the Urban Institute finds that, so far, those claims have been largely unfounded.

The researchers explain that two factors could prompt Obamacare to increase the amount of part-time workers in the U.S. On one hand, they say, employers could cause the shift by cutting hours, as mentioned above. On the other hand, some workers may have been working full-time largely to obtain health insurance. Now that those workers can get coverage through the health exchanges or Medicaid expansion, they might voluntarily decide to work fewer hours.

The study found that neither scenario seems to be the case, at least for now. Though plenty of polls and surveys suggested that employers had either already cut hours or contemplated doing so because of the law, so far, no economic data exists suggesting this has actually happened. Instead, the researchers say the persistently high level of part-time employment across the economy is more likely a product of a slow recovery of full-time jobs in the wake of the Great Recession.

As evidence, they note that the increase in part-time workers who put in more than 30 hours a week, the threshold defined by Obamacare, has been similar to that for workers who clock less than 30 hours.

“These findings suggest that the increase in part-time work in 2014 is not ACA related, but more likely due to a slower than normal recovery of full-time jobs following the Great Recession,” the researchers wrote.

Related: Obamacare’s 30-Hour Workweek Challenged by GOP

Other analyses have also turned up little evidence to conclude that the shift to part-time work is Obamacare related. In February, the Congressional Budget Office announced that there “is no compelling evidence that part-time work has increased as a result of the ACA.”

Still, both analyses stressed that their conclusions were only based on the evidence available so far, and both suggest that this could change in the future, especially once the employer mandate goes into effect next year.

“Our analysis does not rule out the possibility of effects in the future if the mandate goes into effect in 2015 as scheduled and as other ACA provisions are more fully implemented,” the researchers said.

Indeed, as Avik Roy noted in Forbes, just last month the Federal Reserve Bank of New York published a survey of employers and found that 16.9 percent of firms and 21.6 percent of manufacturers said they would be reducing their workforce due to Obamacare.

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