Wednesday, January 1, 2014

More Part-Time Jobs in 2014?

The red line in the chart below is the monthly index of the employment-to-population ratio (which is currently at a 30-year low). In the chart, the employment-to-population ratio is normalized to a value of 100 in December 2007 when the Great Recession first began (in the gray area).

Employment-to-population ratio 2007 to 2013

By this measure (as it was normalized to a value of 100) there has been no recovery in the labor market as indicated by an index value of 93. Employment per capita still remains 7 percent below what it was before the recession began --- meaning, the real number of people out of work has remained very high, despite the falling unemployment rate. This is because millions of so-called "discouraged workers" are no longer being counted as part of the labor force after a given time (which the Bureau of Labor Statistics determines from a monthly household survey).

In the chart, each employed person (the red line) counts the same, regardless of how many hours somebody works. The average weekly hours (the blue line) of private-sector employees finally returned to a near-prerecession level by 2012, and has dipped and peaked throughout 2013.

Starting a year from now in January 2015, the Affordable Care Act will begin to penalize some employers who do not offer affordable health insurance to their employees.

The annual employer mandate fee (officially called an Employer Shared Responsibility Payment) is a per employee fee for employers with over 50 full-time equivalent employees who don't offer health coverage to full-time employees.

  • The employer mandate is based on full-time equivalent employees, not just full-time employees.
  • The annual fee is $2,000 per employee if insurance isn't offered (the first 30 full-time employees are exempt).
  • Unlike employer contributions to employee premiums [or stock-option grants to CEOs1], the Employer Shared Responsibility Payment is not tax deductible.

But part-time employees (working less than 30 hours or four days a week) are exempt for the purposes of determining the penalty.

Because of this, some people (economists, politicians, etc.) believe that the ratio of part-time jobs to full-time jobs will increase in 2014 if the healthcare mandate goes ahead as planned, and so they expect average weekly hours (the blue line) to dip further down with an increase of part-time workers in the labor force.

Some libertarian economists look at this scenario and seem to imply that this is an "incentive" for people to only work part-time, because if they aren't earning enough, they'll be better compensated by the lack of a penalty and by obtaining free (or government subsidized) healthcare.

But in the current job market (or any job market, for the matter), most people don't dictate to their employers what hours they want to work --- the boss decides, not the workers.

Although, in some cases, job applicants might indicate a particular shift they might prefer to work on their job applications (e.g. days, nights or graveyard); but in this over-saturated job market, one can usually assume an unemployed person will check "any" on their job applications --- indicating they are available and willing to work any and all hours that the employer requires.

Only then (if they are lucky), and if they are actually offered a job, will a job applicant have the option of either accepting or rejecting a job offer for whatever hours and schedule they are being offered by a potential employer.

And usually a job seeker's only "incentive" when looking for work, isn't to obtain free (or government subsidized) healthcare, it's to get an income to pay for food and rent. (Some of these libertarian economists can be real jerks2 by implying that unemployed "slackers" are only looking for more free government goodies.)

It will be the employers (not the job seekers), who after crunching the numbers, will decide what's the most profitable to them and what hours their employees will work. For some, having group healthcare insurance plans covering 50 full-time employees may be more advantageous for them, rather than paying a penalty for 100 part-time employees --- or hiring temp workers with less experience or with no training at all.

As usual, unemployed workers have very little say on the matter of hours worked, rate of pay or fringe benefits offered (especially these days, even if they belong to a labor union). The employers only have to abide by labor laws (which many don't), and the job creators have been lobbying to weaken them for decades.

So if Obamacare does create more part-time jobs in 2014, it's not because unemployed workers have been out shopping around for the best deal they can find; as it's always been, it will be the employers who will be looking for the best deal.

Speaking of which, December 31, 2013 marked the 52nd record-high for stocks on the Dow Jones in 2013 --- so Happy New Year to the Top One Percent and their Trust Fund babies from the financially desperate (but newly insured) unemployed workers and their families.

The Top One Percent Learns Early in Life.

1 A CEO's stock-option grants are tax deductible from corporate taxes, and are taxed at a lower rate than marginal tax rates for regular wages, and they are not subjected to any Social Security taxes at all --- and including all their other preferential tax exemptions and deductions --- it's a very sweet deal for the Top One Percent (of whom some, besides having their own hospitals, also have their very own emergency rooms inside their homes).

2 Casey B. Mulligan's bio is at the Cato Institute, an American libertarian think tank that was founded as the Charles Koch Foundation. Casey B. Mulligan has been trying to convince the undecided that ObamaCare has destroyed the American work ethic. But he's really advocating for the Top One Percent, who now have to pay a 3.8% surtax on their investment income (capital gains) earned from their stock-option grants, gold and wine collections --- to fund the expansion of Medicaid for the poor. In my opinion, Casey B. Mulligan is nothing more than a corporate pimp for the rich.


  1. I forgot to mention:

    Although Mulligan didn't mention this in that particular post, he also can't say that the (misleadingly named) business lobbying group (the United States Chamber of Commerce) is against Obamacare because this group is compiled of 98% small business owners --- because 98% of ALL small business owners in the U.S. don't belong to this group (a hedge fund manger with two employees could be classified as a small business).

    A "real" small business might be what I and my then-fiancée ran in 1986 --- a video store. We worked for ourselves (60 to 80 hours a week) and we had 4 regular voluntary part-time employees (college kids), a bookkeeper that came in once a month, and a tax attorney we saw once a year.

    And in 1986, we also paid our employees $9.00 an hour --- something else that the "United States Chamber of Commerce" is also against (besides just providing healthcare coverage to under-paid employees.)

    But Mulligan was right about one thing: Part-time work renders them eligible for fewer benefits the next time they are laid off from a job.

  2. Update ///////////////////

    POLITICO: "Supreme Court Justice Sonia Sotomayor late Tuesday blocked the implementation of portions of the Affordable Care Act that would have forced some religion-affiliated organizations to provide health insurance for employees that includes birth control."

    Well in that case, for religious reasons, I object to religion-affiliated organizations being tax exempt from having to pay federal income taxes to help pay for the wars in the Middle East (that for religious reasons, I also object to.)

  3. Paul Krugman's hilarious comments about debating others on the issues of healthcare, government spending and taxes:

    A zombie idea is an idea that should have died long ago in the face of evidence or logic, but just keeps shambling forward, eating peoples’ brains.

    A cockroach idea is a bit different: it’s an idea whose wrongness is so obvious, once pointed out, that the people who stated it claim that they did no such thing — so that at first you think you have a weasel problem, but at least the cockroaches are gone.

    Next thing you know, however, the roaches have invaded all over again.

  4. According to the Gini coefficient, Latin America is the most unequal region in the world --- although recently, some countries have bucked global trends and enjoyed surprising success in reducing economic inequality.

    The Nordic and central European countries are the most egalitarian.

    Whereas the U.S. is among the most unequal developed countries in the world.

    Maybe Mulligan and his ilk believes (or says they believe) that it's the fault of "takers" for wanting something for nothing (like healthcare).