Behold The Part-Time Worker Society: "We Won't Start Hiring Full-Time People"

Tyler Durden's picture

Once again, as always happens with a very substantial delay, two themes that have been covered extensively on these pages in the past much to the ridicule of the mainstream media, namely that while the US may have "No Manufacturing Jobs But More Waiters And Bartenders Than Ever" and that Obamacare has finally struck as "Part-Time Jobs Surge To All Time High; Full-Time Jobs Plunge By 240,000" are now begrudgingly covered and in fact, endorsed, by the very same MSM.

Enter the Wall Street Journal which blends the two themes well known to our readers, and writes that "More Restaurants Replace Full-Timers, Concerned About Insurance."

To wit: "Ken Adams has been turning to more part-time workers at his 10 Subway sandwich shops in Michigan to avoid possibly incurring higher health-care costs under the new federal insurance law. He added approximately 25 part-time workers in May and June as he reduced some employees' hours and replaced other workers who left. The move showed how efforts by some restaurant owners and other businesses to remake their workforces because of the Affordable Care Act may be turning the country's labor market into a more part-time workforce." In other words, the already worst paying jobs in the US are getting even more of the shaft, downgraded from full time to part time status. Precisely the New "part-time worker society" that we predicted would happen back in 2010...

From the WSJ for those who are still unfamiliar:

Restaurants and bars have been adding an average of 50,000 jobs monthly since April—about double the rate from 2012. In June, they added a seasonally adjusted 51,700 jobs, up from May's 47,900 tally, but below April's 51,800. Overall, leisure-and-hospitality establishments hired more workers than any other industry in June, accounting for 75,000 of the 195,000 jobs added last month, according to the most recent Labor Department report, although economists cautioned against reading too much into one month's preliminary figures.

 

Views differ on exactly what is driving the hospitality industry's pickup. Other factors likely also were behind it, including the addition of new restaurants as well as a move to staff up hiring after scaling back during the downturn, according to some restaurant owners and industry experts. But a number of restaurants and other low-wage employers say they are increasing their staffs by hiring more part-time workers to reduce reliance on full-timers before the health-care law takes effect.

 

"I'd be surprised if the Affordable Care Act didn't have something to do with" the pickup in part-time hiring, said Paul Dales, senior U.S. economist at Capital Economics. "Companies don't want to pay for health care unnecessarily if they can avoid it, so they'll try to avoid it." However, he said "the effects will be harder to discern in the data."

 

For the entire U.S. workforce, employers have added far more part-time employees in 2013—averaging 93,000 a month, seasonally adjusted—than full-time workers, which have averaged 22,000. Last year the reverse was true, with employers adding 31,000 part-time workers monthly, compared with 171,000 full-time ones.

 

The Affordable Care Act requires employers with 50 or more full-time equivalent workers to offer affordable insurance to employees working 30 or more hours a week or face fines. Some companies have said the requirement could increase their costs significantly, although others have played down the potential hit.

 

The cost for small firms to comply with the health law will depend largely on the number of additional full-time employees that sign up for employer-sponsored coverage. Average annual premiums for employer-sponsored health insurance in 2012 were $5,615 for single coverage and $15,745 for family coverage, according to the Kaiser Family Foundation. That is up from $3,083 and $8,003, respectively, in 2002.

 

The administration says the law ultimately will help businesses by allowing them to pool risk with other smaller businesses in order to get more competitive rates. "The health-care law will decrease costs, strengthen small businesses and make it easier for employers to provide coverage to their workers, as we saw in Massachusetts, where employer coverage increased when similar reforms were adopted," said Joanne Peters, spokeswoman for the Department of Health and Human Services.

 

The cost for small firms to comply with the health law will depend largely on the number of additional full-time employees that sign up for employer-sponsored coverage. Average annual premiums for employer-sponsored health insurance in 2012 were $5,615 for single coverage and $15,745 for family coverage, according to the Kaiser Family Foundation. That is up from $3,083 and $8,003, respectively, in 2002.

 

Restaurant owners who have already begun shifting to part-time workers say they will continue that pattern.

 

"Does the delay change anything for us? Absolutely not," Mr. Adams of Subway said, explaining that whether his health-care costs go up next year or in 2015, he will have to comply with the law. "We won't start hiring full-time people."

More here but the message is clear: the part-time "recovery" comes full circle, or as we showed here previously: