This year, ringing in ObamaCare also means ringing in a new definition of the full-time work week: a minimum of 30 hours per week or 120 hours per month. Further, employers must find a way to deal with the magic number of 50. . .employees, that is, or face monthly penalties.
A provocative issue.
Tim Worstall recently wrote an article for Forbes that proposed the demise of the full-time job and the incentivizing of part-time jobs, due to ObamaCare. Worstall shared what was happening at a colleague’s, Warren Meyer’s company. Meyer’s employees are no longer working more than 28 hours so as not to be considered full time employees, because the law states full-timers work a minimum of 30 hours per week.
If any of Meyer’s under 50 employees work full-time, his company will face a bill from ObamaCare in 2014 that will be several times higher than his annual profit. ObamaCare states that companies with staff numbering less than 50, whose employees work under 30 hours per week will not face penalties for failing to provide health insurance.
Consequently, Worstall cites a provocative issue. Aside from impacting the kind of work and numbers of jobs available, ObamaCare also leads businesses to conclude that employer-offered health care for full time employees becomes a strikingly less appealing incentive. Or, if offered, will necessitate an additional shift in sharing costs.
Where would the money come from to pay the penalties?
If employers permitted an employee to work over 30 hours from where would the money come to pay the penalty? Reduced profits? Higher prices? Lower pay?
Likely, an employer would choose to lower wages. However, for low-wage jobs, such reductions dig deep. If an employer has no flexibility to lower wages, then the number of hours worked becomes the line in the sand.
Robert Book, also a contributor to Forbes thinks along the same tack. While it could be argued that two workers could be hired to replace one full-time worker, we might perceive a skewed unemployment figure as the total amount paid to a worker would remain unchanged.
Notably, some businesses can easily substitute part-time for full-time labor, and they will be incentivized to do so. According to the January 15, 2013 edition of The Washington Examiner, “since Obama was sworn into office in 2009, the number of Americans with full-time jobs has actually fallen by 370,000. The number of Americans with part-time jobs, by contrast, is up 1.5 million.”
Doug Elmendorf, Director, CBO, estimates that ObamaCare will cost around 800,000 jobs. For a recovering job market, that’s sad news.
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