Published December 20, 2015
The warnings about ObamaCare from Big Labor and other critics may be coming true, as more evidence surfaces that President Obama’s health care overhaul is causing employers to prepare to push people into part-time work to avoid additional costs tied to the law.
The Affordable Care Act requires mid-sized and large employers to sponsor health insurance for all full-time employees, which it defines as those who work 30 hours a week or more. Big labor unions, which had been in favor of the new law, are now sounding the alarm against it. They argue the sticker shock from the premium hikes is leading businesses to offset the impact by capping hours on employees, despite a recently announced one-year delay in that insurance mandate. If workers don’t clock 30 hours a week, the reasoning goes, employers won't have to offer health insurance.
This sets a dangerous precedent that could affect millions of families across the United States, analysts say. But so far, the White House has brushed off the concerns, saying there are no hard numbers to back up the claims that there will be collateral damage from ObamaCare.
“We are seeing no systematic evidence that the Affordable Care Act is having an adverse impact on job growth or the number of hours employees are working,” Jason Furman, chairman of Obama’s Council of Economic Advisers, said.
While there may not be an official accounting of companies that are cutting, United Food and Commercial Workers Union President Joseph Hansen says it’s only a matter of time.
“Wait a year,” he said in a recent written statement. “You’ll see tremendous impact as workers have their hours reduced and their incomes reduced. The facts are already starting to show up.”
American Enterprise Institute researcher Christopher Conover argues that a review of the anecdotal evidence available leads to one conclusion. “ObamaCare is accelerating a disturbing trend towards a nation of part-timers,” he wrote in an analysis.
Three key groups that will be hit hardest are unions, school workers and local government workers.
Recently, Pennsylvania, North Carolina and Indiana have joined the growing group of states ready to cut their school workers to part-time status, Fox Business Network reports. That means hundreds of teacher aides, bus drivers and cafeteria workers are expected to lose hours. In California, Texas and Michigan, government workers including parks and recreation officials, librarians and secretaries could also have their hours -- and benefits – slashed.
Fast-food CEOs at Subway and Papa John’s say they are already feeling the sting from the health care overhaul.
Papa John's CEO says his employees may face reduced hours if ObamaCare is fully implemented. While John Schnatter has said more Americans having health insurance under ObamaCare is a good, he estimates the change will cost Papa John's $5 million to $8 million annually. Since only full-time employees working 30 hours or more must be covered under the new law, he said he expects franchise owners will be forced to cut employees' hours because they can't afford the costs of health insurance plans.
"That's probably what's going to happen," he told a group of reporters at Edison State College's Collier County campus in Florida. "It's common sense. That's what I call lose-lose."
NBC News recently conducted an informal survey of roughly 20 businesses and found that they were cutting workers to 29 hours a week because of the health care law.
Not everyone is buying the critics' claims. A recent Bloomberg analysis claims Conover’s method is shaky. It also claims the Bureau of Labor Statistics household survey data that he used is “far too volatile to draw reliable conclusions from small samples.”
“I think the 30-hour rule in ObamaCare is bad public policy that will eventually hurt full-time work, as do Conover and Graham,” Evan Soltas wrote. “In fact, I’d like to get rid of the employer mandate entirely. But I also believe in thorough, objective use of data. And they show no evidence of a part-time surge yet.”