Obamacare

Expect Fewer Full-Time Workers Thanks to ObamaCare

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The Department of Unintended Consequences has released its latest report on President Obama's health care law. Last month, J.D. Tuccille noted an early report that restaurant group Darden, which operates the Olive Garden and Red Lobster chains, was looking into ways to cut back the work hours for many employees in order to avoid ObamaCare's employer penalties.

It seems Darden isn't the only big employer thinking this way. The Wall Street Journal reports that a number of large service industry employers — including retail stores, restaurants, and hotel chains — have either begun limiting hourly worker schedules to 30 hours a week or say they are about to do so. That's because starting in 2014, ObamaCare requires employers to either provide health insurance for hourly workers who hit the 30-hour threshold or pay a fine of at least $2,000 per uninsured worker. 

This is likely to affect a lot of workers across the country. The Journal reports: 

Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell. The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands.

"The tendency is to say, 'Let me fill this position with a 40-hour-a-week employee.' "Mr. Russell said. "I think we have to think differently."

…Home retailer Anna's Linens Inc. is considering cutting hours for some full-time employees to avoid the insurance mandate if the health-care law isn't repealed, said CEO Alan Gladstone.

Mr. Gladstone said the costs of providing coverage to all 1,100 sales associates who work at least 30 hours a week would be prohibitive, although he was weighing alternative options, such as raising prices.

So thanks to ObamaCare, these workers will earn less. And they won't get employer-sponsored coverage either. Now, they may have access to subsidized insurance through the law's health exchanges. But if recent projections for premium prices in California's exchange are any indication, individual insurance premiums are going to rise substantially thanks to the law. So they'll be working less and earning less while purchasing mandatory insurance through exchanges that cause the price of insurance to increase. 

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  1. MUST. . .KILL. . .THE. . .ECONOMY.

    1. Someone call for Enrico Polazzo!

  2. Then there will be MORE part-time workers as employers evade health care costs for their minimum wage drones.

    1. That’s correct. Instead of two fully employed people, we’ll have three severely underemployed people.

      1. Possibly. The businesses might instead choose to have shorter opening hours.

        1. A wonderful business model for hotels…

          1. They’ll go to a strictly hourly model. Which will be good, as more unemployed women turn to prostitution.

            See, it’s all planned out.

            1. Fortunately, their contraceptives will be FREE.

              1. … as well as their abortions.

          2. Fewer people on staff at a time is also an option.

        2. The businesses that can will automate, more than they already do.

          1. Which accelerates our inevitable replacement by robots.

            1. When can we replace the politicians with robots?

              1. Now would be good.

                1. Thou shall not make a machine in the likeness of a human mind.

                  1. Politicians arent human.

            2. I for one welcome our robot overlords.

    2. Then there will be MORE part-time workers as employers evade health care costs for their minimum wage drones.

      As a worker, would you rather have a 30 hour per week job, or no job? The increased costs have to be absorbed by someone, and companies are not going to go bankrupt trying to fund the increases in medical insurance costs.

    3. This will affect people who make more than minimum wage. Only a fairly small percentage of people make even the raised minimum wage, and the jobs listed in the article include a lot over minimum wage.

      There’s also no particular guarantee that the total number employed will rise. The lump of labor fallacy is a fallacy. Surely you must agree with that, or else you wouldn’t believe in the concept of insufficient Aggregate Demand and the possibility of fiscal or monetary stimulus?

      1. Thacker – someone who actually argues (the others here just post spittle) – direct labor is now so low it is considered not worthy of tracking. Employment will not change other than the mixture.

        IOW, the employee is incidental to his/her external cost. The system is out of whack.

        1. IOW, the employee is incidental to his/her external cost. The system is out of whack.

          It actually depends on the business. In the service industries, direct labor is probably a large part of operating costs. In manufactoring, not so much. So what will happen is the service industries, the ones that pay the least, will be the hardest hit.

          I agree that the system is out of whack, but neither side wants to do what needs to be done to fix it – namely reduce regulations.

          1. Right, direct labor is less than 2% of cost in typical make-to-stock.

  3. That’s all well and good, Suder-Man, but don’t you know the most important election of our LIVES is tomorrow?!?

    1. His tummy hurts too much to write about that, so he’s posting about issues like some kind of freak.

    2. Suder-man, Suder-man,
      Does whatever Gillespie can
      Writes a post, any size,
      Exposes scum, and their lies.
      Look Out!
      Here comes the Suder-man.

      Is he strong?
      Listen bud,
      He’s got libertarian blood.
      Can he start a comment thread
      He should be on the masthead
      Hey, there
      There goes the Suder-man.

      In the chill of night
      After PM Links time.
      Like a streak of light
      He exposes government slime.

      Suder-man, Suder-man
      Friendly neighborhood Suder-man
      Wealth and fame
      He’s ingnored
      Our comments are his reward.

      To him, government is a fuck up
      Someone should have them locked up
      He is our Suder-maaaaaaaaaaan.

  4. It’s a game. And the endgame is full government employment, everywhere. These consequences aren’t so much unintended as they are a small move in the chess match that is fascism socialism.

    Large employers will start manipulating the workforce, making more workers temporary, or hiring more workers with shorter hours etc.

    In turn, the government, down the road somewhere, will start offering employers incentives and outright subsidies to keep workers employed. Eventually, the government will go as far as paying part of an employees wage. The option will never be “relax the regulatory environment”, it will just be to subsidize and underpin the regulatory environment. Always. Always.

    1. In turn, the government, down the road somewhere, will start offering employers incentives and outright subsidies to keep workers employed. Eventually, the government will go as far as paying part of an employees wage. The option will never be “relax the regulatory environment”, it will just be to subsidize and underpin the regulatory environment.

      Mitt Romney’s entire campaign is proof of this sentiment. How is he going to create these jobs and enact bipartisan legislation? Dollars to donuts it’s by socializing the losses created by earlier idiocy.

  5. Oh, look, an easily foreseeable consequence that was super totally not intended. Oopsie!

  6. Positive rights are all about free stuff without having to work for it, so what’s unintended about this? You are entitled to _____, but not entitled to a job. What’s the problem?

    1. Positive rights are all about free stuff without having to work for it, so what’s unintended about this?

      New meme now. Positive rights are referred to as priviledges.

      1. I thought the word was “entitlements” as in “Baby Boomers are entitled to free shit because they worked for it, man! Worked until their fingers were a frothy pulp of blood and bone! How dare you question that the Boomers aren’t entitled to enslave doctors so that the most important generation in human history might live for ever and ever. Don’t you like rock and roll?”

        1. No, priviledges is the better moniker. Prisoners who get their shower time bumped from thee minutes to five minutes aren’t getting “entitlements”, they’re getting priviledges.

          1. Privileges… whatever.

  7. Wow, this is genius: a way to create m0ar jerbz!

    1. Holy shit, I think you’ve nailed it!

  8. That reminds me of a message that was posted on a local union dipshit hall’s electronic sign: ROMNEY WANTS TO CREATE 12 MILLION MINIMUM WAGE JOBS. Oops.

  9. The Department of Unintended Consequences

    [insert iron law argument here]

    1. The DOUC… just needs a couple more letters.

      1. Department of Unintended Consequences, Home Edition.

  10. “The Department of Unintended Consequences has released its latest report on President Obama’s health care law.”

    Please tell us why you think these are unintended. There’s really no need to be diplomatic in the face of those who are INTENTIONALLY suffocating the economy. More part-time workers means more people who can’t afford mandated insurance premiums, which means more people who will look to the government for relief, which means more votes for those who give this relief. Bonus: they can chalk up the lack of full-time jobs to a “market failure.”

  11. Yes, let’s see if the majority of American voters are intelligent enough to vote out the jackass who shoved this monstrosity down our throats.

    Who knows what other crap is in the 2,000 page pile of shit.

  12. Obama has ended the dreaded 40 hour work week! What a people’s president!

  13. See, full employment!

    I told you Obamacare was going to be a job creator!

    /Spacebar Tony/Shrike/Minuscule joe logic.

  14. At some point, after the consequences have been harped on for months, the consequences go from being unintended to intended.

    Obama can say he’s too ignorant to have believed these predictions when ObamaCare was being debated in Congress, but he can’t say he wasn’t warned.

    When rational people pointed out that making unemployed people more expensive to hire might make them less attractive as prospective employees, Obama treated that objection like it was pseudoscience.

    No really.

    And Obama hasn’t done anything else to make employees more attractive to hire either. Quite the opposite, actually. He can’t tell the difference between what makes businesses hire unemployed people and his own stupid mouth.

    Barack Obama is a moron.

    1. I”m not sure he’s a moron.

      The bill is doing exactly what he wants, forcing more people to depend on the government, through direct means (a mandate) and indirect means (a shitty economy).

      All this and he is still likely to get re-elected. This guy knows the American people better than I do.

  15. What they ought to do is cut hours to 30/week and give affected employees a 33% raise. Enjoy your cheaper Obamacare, folks.

    1. Why would they give them a raise for less work?

      1. To make a point about how it’s still cbeaper for the employer than paying the increased insurance premiums. And to retain at least some goodwill (right).

  16. Reminds me of that scene in The Wire when the cops were sitting in the car watching some corner boys get beat up.

    “See that? That’s why, in the end, we can’t win any ‘war on drugs.’

    “How so?”

    “When we fuck up, we get promoted. When they fuck up, they get the shit beat out of ’em, or worse.”

    The leftist conceit is that the state can just design a set of regs and impose them on society, and individuals will just carry on as usual, with no reactions to said policy.

    1. You mean, “with only the intended reactions to said policy.”

    2. You do realize no one is coming to any realization that if the work force is cut back it won’t be because of Obamacare but because of greedy coporate interest.

      You can’t and won’t win the narrative.

      1. Like this piece I read in the Seattle Times yesterday:

        http://seattletimes.com/text/2019592484.html

        “It’s Wal-Mart’s fault!”

      2. Like this piece I read in the Seattle Times yesterday:

        http://seattletimes.com/text/2019592484.html

        “It’s Wal-Mart’s fault!”

    3. Of course, the leftist conceit follows through to “Well, it’s not the government’s fault, if everyone would just behave exactly as we tell them this would have worked perfectly.”

  17. So thanks to ObamaCare, these workers will earn less.

    Thanks to “greedy capitalists”, you mean.

  18. Let’s say I own one of these large restaurant groups. What’s to stop me from doing the following:

    1. Setup a “contracting” agency that only serves my restaurants.
    2. Hire new guy to a 29 hr/week part time position at a restaurant.
    3. Hire same guy to a 29 hr/week part time position at the “contracting” agency.
    4. Make new guy work all his hours at the restaurant.

    Is there anything in Obamacare to prevent this from happening? (Other than the hassle of having to set up another company just to help your actual, productive company be productive.)

    1. Companies that are wholly owned by other companies file consolidated tax returns with the parent company. It’s likely they would treat the employee as an employee of the single tax-filing parent company for the purposes of the rule (although I haven’t actually read the law or the regs on it).

    2. Welcome to France where there’s the wonderful institution of the 49 person corporation. For many company, it’s worth the trouble to actually incorporate a new entity just to avoid the dreaded 50 person mark. And that’s before the current President who’s determined to drive out all rich people who can count.

  19. There are already many reasons to avoid hiring people full time. The trend has already been to move employees off full-time hours to part-time hours. Obamacare will rapidly accelerate this process.

  20. Someone working 29 hours a week as a cleaning lady or waiter is probably going on Medicaid, not private insurance. Other than that, good article.

    1. Or they will have to pick up a second job with their new lower hours.

  21. Wow thats absurd, in 2013 I will actually be able to GET health coverage with no pre existing clause, thanks to Obama! That moron Romeny, bought and paid for, will ruin that if he is elected.

    http://www.anon-you.tk

    1. I guess this is just one of your off days, Anonbot. Don’t worry, we’ll get a programmer right on that.

    2. Is anonbot actually Tony?

      1. How dare you?

    3. Holy crap, I saw a real person post almost the same thing on another site.

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