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Low-Wage Hours At New Low As ObamaCare Fines Loom


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Low-Wage Hours At New Low As ObamaCare Fines Loom

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Low-wage workers clocked the shortest workweek on record in December even shorter than at the depth of the recession, new Labor Department data showed Friday.

The figures underscore concerns about the ObamaCare employer insurance mandate's impact on the work hours and incomes of low-wage earners.

It's impossible to know how much of the drop relates to ObamaCare, but there's good reason to suspect a strong connection. The workweek has been getting shorter in many of the same industries where anecdotes have piled up about employers cutting hours to evade the law's penalties.

While weather likely played some role in December, that's not the driving factor. The low-wage workweek in November had already matched the prior record low set in July 2013, just as the Obama administration delayed the employer mandate until 2015.

Further, January's data not yet broken down by industry subgroup show that rank-and-file retail workers saw another big fall in average work hours, matching a record-low 29.7 hours a week.

In December, office supply chain Staples cut the schedules of part-time workers to a maximum of 25 hours per week, below the 30-hour threshold at which the Affordable Care Act's employer mandate kicks in.

In November, David's Bridal reportedly cut even full-time salespeople and stylists below the 30-hour mark.

ObamaCare's penalties won't apply until 2015, but they will reflect 2014 staffing levels, giving employers little time to adjust.

More Jobs, Fewer Hours

IBD's gauge of the low-wage workweek, now at 27.4 hours, includes the 30 million nonmanagers working in private industries where pay averages up to $14.50 an hour.

These industries boosted payrolls by 700,000 (nonsupervisors) in 2013, or 2.4%, but hours worked grew at half that rate. In effect, shorter hours would have explained 323,000, or 47%, of those new jobs.

Again, weather wasn't the primary factor. Even if the workweek had held steady in December, the workweek would have been responsible for one-third of the jobs added in low-wage private industries last year.

That's not to say that overall job creation is weaker than it appears. That's because the workweek has moved higher for non-low-wage workers. This group, including managers and those in higher-paying industries, is now clocking a longer week than prior to the recession.

Finding The Problem

That divergence explains why many economists and nonpartisan arbiters like the Congressional Budget Office have concluded that ObamaCare has had no impact on part-time employment. The effect doesn't show up in aggregate workforce data, but that is the wrong place to look.

Low-Wage Workweek Hits Record Low As ObamaCare Mandate Looms - Investors.com

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February 11, 2014


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