Guest Post: Low-Wage Hours At New Low As Obamacare Fines Loom

Tyler Durden's picture

Submitted by Jed Graham via Investor's Business Daily,

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 a strong connection is possible. 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.

The private employers for whom ObamaCare's mandate is a concern are those with a primarily low-wage workforce.

Incoming ObamaCare enrollment data show that three-fourths of subsidies are going to modest earners making less than 250% of the poverty level, or $29,175 for a single person.

ObamaCare Incentives

Businesses will face a nondeductible fine of $3,000 for each worker who receives a subsidy to buy insurance via the new exchanges. (For retailers facing a 39.2% federal and state tax rate, the fine would equal $4,930 in deductible wages.)

For employers in industries with low profit margins and modest-skill jobs, ObamaCare's costs clearly provide an incentive to cut work hours. Companies do, however, have to weigh the potential downside of shorter workweeks — lower morale and worse customer service.

Anecdotal evidence suggests that low-wage employers may be pushing full-time workers to clock more hours, even as they are limiting the size of their full-time workforce.

Still, the workweek got shorter across a broad range of low-wage industries in 2013. Average weekly hours fell 1% at supermarkets, 2% at clothing stores, 2.4% at limited-service restaurants, 3.2% among providers of home care services to the elderly and disabled, 4.2% at general merchandise stores, 7.2% at retail bakeries and 7.7% at home centers.

The data suggest that lawmakers should consider if the big minimum-wage hike on the president's agenda is compatible with ObamaCare's employer mandate. The combination would hike low-wage labor costs by up to 70% and could further encourage a part-time shift and complicate the goal of reducing inequality.



Of course, as Paul Krugman told Stephen Colbert....


 "I'm ok with a little bit of wealth redstribution from people who have been lucky to people who are unlucky."

Seems to sum up a lot of perspectives nowadays "lucky" taxpayers helping "unlucky" others (like "unlucky" bets on real estate derivatives, "unlucky" bets on leveraged Russian bond arbs, "unlucky" Detroit pension fund holders...)

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knukles's picture

Fuck Paul Krugman
Give a big chunk of yours away...

Betcha he's on a nice cushy Cadillac plan that's got full post retirement bennies along with.

Another Hypocritical Limousine Liberal


Stoploss's picture

He's probably on the list, so don't fret too much. Not worth it. OK maybe the sweat off your balls, but that's it.

Boris Alatovkrap's picture

Please to explain for Boris...

In Amerika, must make it purchase of health care INSURANCE... not is healthcare for body, but is insurance for wallet. New law is make require of insurance company is cannot deny coverage for prior existence of medical condition. Insurance actuarial is correctly to predict new sicker person is introduce urine to healthy risk pool, so is raise rate. New rate is not so attractive to for young healthy person, so now insurance is go up. Penalty is for not purchase insurance, approximately 70 euro...

So why is anyone for sign up!? Except sick person with prior existence condition?! If you are get sick, or if you are fall accident, you are THEN sign up. Otherwise, you are pay fine. Smart money is not insure until is need coverage.

Boris is predict massive failure in 3, 2, 1...

... but what is poor stupid Boris know compare as elite Harvard Education Economist?

DoChenRollingBearing's picture

I hope Blue Cross keeps us on...

Boris Alatovkrap's picture

Blue is color of sick man just before is die, no?

pursueliberty's picture

Yes, maybe.


Blue Cross sent me a letter end of last year stating no increase for 14, fuck that has me worried for 15. 

Early 30's male, paying $83 with a 2k deductible.  My ex wife told me a couple days ago that she is for losing her policy.  New policy $360/month with same $1500 deductible, old policy is less than $150. 

Freddie's picture

See.  Private insurance is BS and makes a monopoly for insurance and the medical cartel but is still better tahn ObamaCare.  Blue Cross sucks big time but with ACA you would be paying $300 plus with a $10,000 deductible.

Most young people can afford $83 a month for their health when they are probably paying $70-100 a month for a cell phone.

Boris Alatovkrap's picture

Ah, but maybe cannot is afford extra $83 BECAUSE is pay $100 for cell phone plan. This is choice, no? Is like Boris can choose purchase of toilet paper or can purchase fine vodka, but cannot is afford both. Is government, even Russia government, to force Boris make purchase?

kchrisc's picture

As most muggers know, it's harder to mug people without a weapon.

Boris Alatovkrap's picture

Beware of mugger carry pliers.

tempo's picture

Krugman works for the .01%. Spreading the wealth means taking one full time job with benefits and creating two part time jobs w/o benefits forcing the majority to depend on the Government. The .01% make more money.

Boris Alatovkrap's picture

Everyone is work for 1%, some are just pay better and is keep nose in more close proximity of bowel of 1%.

Droel's picture

We're the New France.

Less work hours, moar Socializm.


Boris Alatovkrap's picture

If USSA is New France, where is delicious cheese and fine wine?

F em all but 6's picture

All US have money for is Velveta and Maddog 20 20

NoDebt's picture

More like government cheese and meth, but yes.

anefarious1's picture

Wait until the people find out they owe a big fat penalty to Obama's insurance companies. If I didn't have insurance I'd owe $858 this year according to

And people think they just have to pay $95 lol

The economy is going to tank even harder if you do pay your premiums! We are the damned generation. Bend over!

nmewn's picture

Eat your peas, maggots.

Caveman93's picture

I have no wealth to play with so good fucking luck assholes!

It's not a penalty...IT'S A FUCKING TAX!

You didn't earn this job.


Ignatius's picture

A tax up the ass of them who can least afford it.

TheRideNeverEnds's picture

Maybe so but you must admit this is face meltingly bullish for tech and other stocks as they will not require healthcare for the computers and robots that are replacing labor at ever increasing rates.


All we have to do is print more money to pay to keep the underclass alive to consume and then its all good.  


I am a little confused as to why the lower class is even needed though, is it really that they just want someone to rule over and toy with or is it that they have no good plan to get rid of said useless eaters at the present time without disrupting their own lives?

NoDebt's picture

100 Million people fully on the dole at $40K a year in benefits is only $4 Trillion a year.  Yeah, that sounds totally do-able.  I guess we're going to do it and find out for sure.

DR's picture

"set in July 2013, just as the Obama administration delayed the employer mandate until 2015."


If businesses don't have to worry about Obamacare until 2015 then why are they cutting hours NOW? Because there ain't no DEMAND!

Georgia_Boy's picture

I don't know what to make of the stat that jobs at the low end are growing faster than work hours. But I agree, it's a little early to blame Obamacare directly, at this point it's mostly about demand. The smarter workers are figuring out they need to seriously deleverage and build up savings, and do so BEFORE the chickens really come home to roost for the current round of excesses (QE, the education debt bubble, and yes, Obamacare). So the 70th to 99 percentile are cutting back and it's impacting the lower-paid workers, hence the retail trouble. I'm working more overtime now, buying less in the stores, spending a lot less time at the local watering holes, and downsizing my household overhead.

Spastica Rex's picture

Luck has nothing to do with anything, ever.

Skateboarder's picture

Luck is a subset of probability. ;)

Spastica Rex's picture

Not in:

A) a universe where causality is maintained

B) a universe where there exists a supreme being, and omnipitence is an attribute of said supreme being

among many other possible scenarios that preclude chance and free will.



Skateboarder's picture

God is a subset of probability too!

I've discussed the notion of truth being the root of everything, i.e. the states of truth are the computational results, perhaps through a passage dimension we call time. They don't particularly need to interface with passage dimensions though.

If you take the notion that probability may or may not exist, that is a state of truth. Thus probability itself is contained within truth.

Allan's Snackbar!

RichardP's picture

God is a subset of probability too!

If God actually exists, and created everything, then he created probability.  If God created everything, then he is outside of what he created, not constrained within what he created.

Unless God is only a figment of someone's imagination.

Skateboarder's picture

God has to be a subset of probability, because the probability that god doesn't exist, exists.

cherry picker's picture

It really doesn't matter about probability or subsets insofar as that which we refer to as God is concerned.

The mysterious nature of life and that which allows it is beyond our imagination, vision or comprehension.  If we had a clue, we would be divine.

sessinpo's picture

"Spastica Rex     "Luck has nothing to do with anything, ever."



Excluding Obama and Krugman, right?

sunnyside's picture

I have a relative who works in store management for a major grocery store.  As of last year they were told no front end (cashiers) people could be scheduled or work more than 28 hrs.  Part time work for all Americans.

Seasmoke's picture

If Obama didn't have bad luck. He would have no luck at all. What a fucking moron.

WillyGroper's picture

He needs much badder luck.

andrewp111's picture

What do you mean? Obama had better luck than anyone. An empty suit community agitator, he is able to create a greased path for himself to the IL State Senate, and 10 years later the Media discovers him and propels him into the US Senate and then the Presidency - twice.

sessinpo's picture

Seasmoke     If Obama didn't have bad luck. He would have no luck at all. What a fucking moron.



Couldn't disagree with you more. A totally unqualified Marxist becoming President, not lucky?

And hasn't Obama gotten a lot of what a Marxist wants? Do I need to make a list?

10mm's picture

The entire workforce in America is full time employed at 31%.

MilwaukeeMark's picture

Thanks Chief Justice Roberts for the gift that keeps on giving.

mofreedom's picture

He'll forever be known as the COOL black robe!  Can we blame bush for that one?  BUSH, speak UP, HELLO, got an opinion on the matter?  People bin shittin on ya for ten years, IT"S YOUR turn if you got the GUTS.

What a depressing day that was.  Gays and Obangycare!!!


No Prayer!!!!!

Jumbotron's picture

A Republican and was nominated by a Republican President (George W. Bush) first to the D.C. Circuit then to the Supreme Court.  Was voted into that office by a majority held Republican Congress.

What do you get when you cross a Limousine Liberal and a Limousine Conservative?    America as it is today.

Elections have consequences.  Too bad that it doesn't matter any more who you vote for.  You still get the consequences.

mofreedom's picture

If your choice was between two janitors from oposing parties I'll bet it would matter.

Please God, at least give us Term Limits before your burn us down!

I don't care if said janitor doesn't understand procedural order, I'd rather see fist fights in there rather than today's bloody tampon fights on the capitol steps!!!

Jumbotron's picture

Term limits will do no good what so ever.  You'll just shuffle in more corrupt politicians in and out the door faster.  The real power brokers.....the Federal Reserve, the Global Banksters, Wall Street, Globalist CEO's, the lawyers, and the lobbyists.....they would have no such limitiations.  You can't limit an idea, a philosophy....namely a one world crony capitalist economy full of captured and compliant sheeple world wide.

It's a Big Club.....and you ain't in it.  You were born on Prison Planet.  Know that truth and then you can set about to finding real freedom.....the freedom of the mind.  From can deal with anything.  Including how to live in Prison Planet without going insane over the false choice and false hope of an election or the belief in some transitory human political system.


Jumbotron's picture

Furthermore.....America died the day they ratified the Second Constitution.  That would be what we today call simply "The Constitution".  The Federalists won the day over keeping the original constitution....namely...."The Articles of Confederation". 

The Anti-Federalists, headed up by Patrick Henry failed.  The Elites won.  And no wonder that soon after Alexander Hamilton was able to push through the establishment of the First Bank of the United States, the forerunner of the Federal Reserve.  He convinced Washington to sign the bill claiming the bank was constitutional because it was a "private" entity and that corporations were "people" too and could not be treated any differently than individuals vis a vis the constiution.....(this being the newly ratified, Federalist approved "Second Constitution"). 

Washington signed it......and shit on the graves of every American who fought and died in the Revolution and everyone who has fought and died since.  We had defeated England......and then handed the country over to the Banksters.

And after all these centuries of so called "free" elections.......look what the Banksters and the Elites have wrought.  All the while YOU think you had a choice....that your vote matters.

The American Dream is a's time to wakey wakey.

DanDaley's picture

Krugman: "I'm ok with a little bit of wealth redstribution..."  Yeah, like everything you make and everything you will ever make.

Jack Burton's picture


No system could get this fucked up, without the help of politicians, all of whom answer to the corporate health care industry and drug companies. Profits are massive and spread among thousands of insurers. They get rich, you get fucked, it is the American way of sick care that is sick.

mumbo_jumbo's picture

 "I'm ok with a little bit of wealth redstribution from people who have been lucky to people who are unlucky."

well that was what the bailout was all about the bankers got unlucky and lucky for the US taxpayer we were their to bail them out..

Dre4dwolf's picture

When will we learn that its better to create wealth than to waste energy re-distributing what we already have.


Trickle down economics works, but not in the sense of dollars trickling down to the poor.

A real example of trickle down economics = Rich guy buys a 60,000$ car, gets bored of it after 6 years and sells it to someone for 14,000$.

There is nothing wrong with the car in 80% of the cases.

Same thing happens with homes, boats, businesses, plant equipment etc..... the whole economy benefits off the success of an individual because whatever that successful person pays to have made (the car for example) enters the economy as real wealth that eventually gets sold/transferred etc...


Dollars are worthless, they are just a transfer mechanism....

When you switch the focus from wealth creation to....redistribution its an admission that "there isn't enough to go around" and that should in a perfect free market world... signal the market to create wealth.

But when everyone isnt thinking of ways to make up for the shortage, and are instead plotting and scheming to steal what they can from others.... you endup with social  unrest and a failed economic system.


And that's where we are at today I think.

Ghostdog's picture

A beedie eyed loon