Measuring What Didn't Happen: Did Obamacare Cause an Increase in Part-Time Jobs?

Townhall.com ^ | October 24, 2013 | Mike Shedlock

[Kaslin]

A friend sent me an article in Reuters today that claims Little evidence yet that Obamacare costing full-time jobs.

One in five businesses in the service sector think President Barack Obama's signature healthcare reform has hurt employment at their firms over the last three months, a National Association of Business Economics survey showed on Monday.

But there is little discernible impact in the employment figures released in recent months, including the September numbers out on Tuesday. The number of people with part-time jobs who want full-time work, for example, was essentially flat in September at 7.9 million.

The number of part-time workers spiked in 2008, well before Obamacare was enacted, and has been slowly falling as a share of total employment since 2010. In September people working part time because they could not find full-time work made up 5.5 percent of the employed, unchanged from August. The spike in 2008 and the steady drift downward since then suggests the elevated level of part-time workers is more likely due to the economy's weakness.

Did Obamacare Cause an Increase in Part-Time Jobs?

Barry Ritholtz at the Big Picture Blog says "no" in his October 7 post Did Obamacare Cause an Increase in Part-Time Employment?

A reader emailed the following question about this weekend’s WaPo column (ObamaCare: Investing Advice for Senator Ted Cruz):

"How can you make investment decisions about future returns in light of Obamacare driving so many workers to part time status?"

Ahhh, a classic bit of misdirection — an assumption built into a question. The first step in answering that is to verify the reality of that assumption: Has Obamacare actually caused an increase in part-time employment?

As you can see in the black line below, the number of part time workers spiked because of the Great Recession. It peaked and began to slowly reverse before the ACA [Affordable Care Act - Obamacare] was even passed.



No, there does not appear to be an increase caused by Obamacare.

Measuring What Didn't Happen

For now, let's assume the above chart from the Economic Policy Institute is correct. Does that imply there was no Obamacare effect?

Of course not, and Ritholtz should know better.

Even if the EPI chart is correct, it does not show what would have happened had Obamacare not passed.

Realistically, to determine the Obamacare effect, we need to measure what we didn't see (which is what would have happened in the absence of Obamacare).

I am inclined to believe what corporate CEOs are saying given strong evidence they did what they said.

Reuters reported "Many businesses polled by the NABE said they were holding back on hiring due to the costs imposed by the law. The survey also showed 15 percent of service sector firms planned to shift to more part-time workers due to Obamacare."

There is massive evidence that businesses increased part-time hiring due to Obamacare. There is massive evidence of other economic distortions as well.

Obamacare Economic Distortion Synopsis

• October 10, 2012: Prepping for Obamacare, Olive Garden and Red Lobster Cut Workers' Hours; Are Other Companies Doing the same?
• October 20, 2012: Mish Obamacare Mailbag: Expect More Part-Time Jobs
• February 02, 2013: Obamacare in Action: Retail Workweek Hits 3-Year Low
• February 19, 2013: Opting Out of Obamacare (the Unaffordable Health Care Act); Not Even Labor Unions Want It
• May 3, 2013: Obamacare Affects Part-Time Employment Yet Again; Nullification Bill Passes South Carolina House; Analysis of Healthcare Penalty Rates
• May 20, 2013: Obamacare Premiums 47% Higher But Deductibles 27% Lower Than Grandfathered Health Plans; Obamacare Lies
• June 21, 2013: Obamacare Effects Hit Local Governments, Small Businesses, Temp Staffing Agencies; Chicago Dumps Retirees Into Obamacare
• July 8, 2013: Trends in Full and Part-Time Employment; Obamacare Job Double Counting and Other Economic Distortions
• July 12, 2013: "Win-Win" Situation for Employers to Not Offer Healthcare to Part-Time Employees; Now Ain't That Special?
  
  OK Mish, Why Doesn't the EPI Chart Support Your Case?
  
  
  1. Perhaps the Obamacare distortions were masked over by other hiring trends.
  2. Perhaps the BLS data will be revised away later, showing what really happened.
  3. Perhaps the assumption we made earlier, "the EPI chart show by Ritholtz is an accurate reflection of the current state of affairs", is in fact, a bad assumption.

  
  
  Let's explore point number three. Please consider a chart of BLS data, taken from the St. Louis Fed (Fred) Website.
  
  Employed, Usually Work Part Time 2000-2013
  
  
  
  Let's hone in on that for a closer look.
  
  Employed, Usually Work Part Time 2008-2013
  
  
  
  Questions and Answers
  
  Q.What would the chart look like without Obamacare?
  A. Better
  
  Q. Was the Obamcare hiring effect delayed until 2012?
  A. Probable. That is when CEOs started complaining. That is when numerous restaurants cut back hours.
  
  Q. Will we see BLS revisions that make the reported data look worse?
  A. Probable
  
  Q. Does the Economic Policy Institute chart reflect reality?
  A. The chart from the St. Louis Fed is a closer approximation, but revisions are likely
  
  Q. Has Obamacare actually caused an increase in part-time employment?
  A. Absolutely.
  
  That is what the chart suggests (even before expected BLS revisions). That is what CEOs say. And that is what plain common sense suggests in the first place (even though we will not understand the full impact for years, if ever).
  
  

[knarf]

duuuhhhhhhhh .....

[circlecity]

The more significant statistic is the ratio of part time to full time jobs and how that has changed since Obamacare passed. The total number of all types of jobs has fallen since 2008 so comparing total numbers between then and now is immaterial.

[TurboZamboni]

[Wingy]

If anyone believes the numbers out of this administration, be it BLS or Treasury, or anything west of the weather service, direct them to my friend that has a bridge for sale.

A prime investment, he tells me.

[Venturer]

Figure don’t lie, but liars figure.

[pallis]

Funny, I’ve read a number of posts about businesses that have said they are going to part time positions because of Obamacare, and numerous articles about people working two part time jobs to replace the one job they had. Obamacare might not be responsible for all of it, but the fact that Obamacare hadn’t rolled out when many of the part time jobs were created doesn’t mean it wasn’t the reason for them. Businesses anticipate future impacts of government mandates, and react accordingly. The assumption that Obamacare has caused, and will cause, part time jobs where full time jobs once existed is rock solid reasoning.

[Vaduz]

Not only did Obamacare cause an increase in part time Jobs it caused an increase in no jobs.

[Kaslin]

Exactly, he has also managed to make Chancellor Angela Merkel of Germany pissed at the US for having his goons spy on her personal cellphone

[DBeers]

Organizations Funded by George Soros and his Open Society Institute

[DBeers]

Discover the Networks: Economic Policy Institute (EPI)