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Hourly Mandate Prompts a Full-Time Work Debate

Tom Williams/CQ Roll Call File Photo
Bridenstine says a business in his Oklahoma district plans to cut its workforce from 57 to 49 employees to avoid the employer health insurance mandate.

A study earlier this year by the Labor Center at the University of California, Berkeley, estimated that roughly 1.8 percent of the U.S. workforce is at risk of being placed into part-time work as a result of the law. While that share is relatively modest, it still represents 2.3 million workers, according to the study.

The study looked at workers working 30 to 36 hours a week who did not have health insurance through their employers or through a family member. But because of data limitations, it only included employers with 100 or more employees, which means it may underestimate the true effect of the mandate.

That study follows a report last year by the Urban Institute looking at the effect of the 2006 Massachusetts health care law that served as a model for the 2010 legislation. In Massachusetts, the law “had little negative effect on private sector employment.”

While the report acknowledged some differences between the two laws, it said the results in Massachusetts “suggest that national health reform does not imply job loss and stymied economic growth.”

And another study published in the American Economic Journal: Economic Policy found that a requirement in Hawaii that employers offer health coverage to workers working 20 or more hours a week only increased the share of workers working fewer than 20 hours a week by 1.4 percent.

The Federal Reserve Bank of San Francisco concluded in August that “both the impact of the law so far and the ultimate effect are likely to be small.”

And despite the anecdotal evidence of employers shifting people to part-time work, it remains to be seen whether the trend will be widespread.

A recent survey by the Federal Reserve Bank of Minneapolis found that 89 percent of employers in the bank’s district said they would not shift people into part-time jobs.

“In terms of significant effects, we haven’t seen that yet, and these adjustments seem to be anecdotal and appear to be fairly minor,” said Mark Perry, a visiting scholar at the American Enterprise Institute and an economist at the University of Michigan-Flint. “That is kind of against the consensus that this is going to lead to part-time nation.”

To be sure, the number of people working part-time even though they want to work full-time has shot up over the past few years. But much of that increase is because of the lingering effects of the recession. It’s common for the number of part-time workers who would prefer full-time work to spike during downturns before dropping in recoveries. Businesses find they no longer need workers to work so many hours, for instance. Or job-seekers realize the only jobs that are available to them are jobs that are by nature part-time, such as bartending or retail jobs.

In this case, the sputtering recovery has kept the number of involuntary part-time workers elevated. The number of people working part-time who would rather work full-time doubled between September 2007 and May 2009. It has dropped since, but remains higher than at any point before the recession.

According to the San Francisco Fed, however, the share of all workers who work part-time is not historically high. At its most recent peak, in 2010, 19.7 percent of those employed worked part-time, slightly lower than the 1983 peak of 20.3 percent.

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