As the Supreme Court ponders whether the Obama administration can constitutionally take over the private sector when it comes to health care – and then order all Americans to buy health insurance—an unintended consequence is lurking in the government’s unemployment figures. Plagued by fears of explosive costs from mandated healthcare, companies are quietly transitioning much of the American workforce into a nation of part-time employees.
If left in force, the Affordable Health Care Act (AHCA) could doom a generation of American workers to part-time jobs. This is in sharp contrast to the legions of full time government workers who will implement the law’s myriad regulations while they enjoy a smorgasbord of health care options subsidized by taxpayers who will have few in the years to come. This is especially poignant as people file their taxes today.
Moreover, rising gas prices, trade imbalances, a depressed housing market, burdensome federal regulations and the outsourcing of manufacturing jobs have all weighed heavily on the ability of companies to hire and expand their businesses. A depressed growth rate projected near 2% through the end of 2012 is far below the 4 to 5 percent needed to have a meaningful impact on the unemployment crisis.
Still, the Obama administration seemingly uses origami to twist official unemployment reports into something more pleasing to the untrained eye.
Many economists have weighed in on the deceptive tactics of the Obama administration, such as not counting people who are so dispirited they’ve stopped looking for work and subtracting jobs lost that will never return. Also going unreported are new home-based businesses that don’t yet provide full time income but are enough to get workers off unemployment rolls.
In fact, my organization, Crown, a non-profit business and personal finance policy and educational group, predicts that America will increasingly become a nation of part time workers and day laborers as more and more people are forced to take on less than satisfactory work situations.
Looking internationally, it is clear that the U.S. has followed Europe -- again as it did with forays into overextended banks and collapsing governmental budgets-- as we are now imitating the move toward underemployed, part time workers.
Reporting for European Voice, Constant Brand noted, “A shift from full-time to part-time has been noticeable across the EU. The number of people in part-time jobs grew from 15.9% in 1998 to 18.8% in 2009, according to the latest figures from Eurostat, the EU's statistics agency.”
In the U.S., the rising but unpredictable costs of the health care law are certainly contributing to growing part time employment rolls, asserts Hardees CEO Andy Puzder, who is concerned about the projected costs of the law on his company. Looking at projected increases in health care costs of 150% by experts working with Hardees, Puzder said that companies must make tough choices. “If we are spending that money toward healthcare … the costs would be those job creating projects that we wouldn’t be able to fund.”
But there is one solution for dealing with that increase, said Puzder, and that is converting 40-hour a week full time employees into 30-hour a week part time employees. “You want full time employees, but it’s one of the options available to employers,” he observed.
Faced with explosive health care costs, a rational business decision would be to cut loose a generation of employees, leaving them to survive in a flagging economy by piecing together two or three part time jobs. That will put the burden of health care costs on individuals and state and federal budgets.
One could argue that it is an intended consequence of the AHCA that workers are made more dependent on the federal government as the ability of businesses to provide for workers is weakened. There are no doubt those who see a nation of part time workers looking to a strong central government for cradle to grave benefits as a good thing. Perhaps it would be, if you’re in charge of overseeing this socialist restructuring.
For the rest of us, clearly it’s a mistake.
Just as companies today are struggling to understand the real costs of the AHCA, taxpayers are left to wonder about their end of the price tag. It is a fundamental failure of the AHCA its hidden costs could overwhelm individual, corporate and governmental budgets. Or is it? Again, it depends on your perspective.
The late Larry Burkett, Crown founder and author of "The Coming Economic Earthquake," predicted in 1991 that if the government ever nationalized health care it would be a deathblow to the nation’s economy.
Then and now, equipping people to survive and thrive in a struggling economy is the central mission of Crown. It has never been needed more than today, as so many face diminishing opportunity and stagnant job growth. But with a single decision, the U.S. Supreme Court could provide more incentives for businesses to hire workers than any government program, tax cut or policy. In overturning the AHCA, the high court could save millions of full time jobs across the country.
Unless something changes, the trend will continue toward a nation of part time workers, cobbling together various jobs with no real loyalty or personal ownership in the affairs of the companies they pass through.
The part time worker’s true loyalty will be transferred to a federal government that provides health care and dictates the terms of work and life with an increasingly firm hand. Not only will this cripple the economic engine that made America great, it will make it impossible for individuals to achieve the American dream as they struggle with long term chronic unemployment and underemployment brought about by political ambition and bad policy.
Chuck Bentley is CEO of Crown, a non-profit business and personal finance policy and educational organization, and author of “The S.A.L.T. Plan. How to Prepare for an Economic Crisis of Biblical Proportions” and “Root of Riches, What if everything you think about money is wrong?”