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September 27, 2013

Obamacare creating “part-time” America

Joe Charlebois

The Affordable Care Act (ACA) is effectively pushing hundreds of thousands of Americans into the ranks of the under-employed and toward a lower socio-economic status.


The already troubled economy, which is suffering from extremely low rates of growth, has already been affected in a negative way by the looming costs associated with the ACA. As corporations, local and state governments and many colleges look for ways to contain the impending costs, many have reduced the number of hours an employee may work per week. They are responding in a predictable way.


These businesses and government entities that are cutting hours will avoid the crippling mandates of the ACA. In many cases the additional costs associated with mandatory coverage would cause too great a budgetary burden to operate efficiently or profitably.


An example of the effect of the upcoming demands on American employers can already be seen within the accommodation industry.


Following the 2008-2009 recession, the accommodation industry employees worked an average of approximately 28 hours per week. This was surpassed in July 2013 with a record low number of 27.4 hours worked per week average.


But July’s numbers of low income ($14.50/hour or less) employees are in the midst of a “recovering” economy. Even with the recession that decimated the travel industry following the 9/11 tragedies, the number of hours per employee dropped to only 29 hours per week. This analysis of the Bureau of Labor Statistics (BLS) by Investors Business Daily showed that there is more to this than just a slow economy.


The U.S. is technically in a recovery – no matter how small the growth – but has seen the number of unemployed and under-employed at levels too high for an economy that is growing. The latest BLS data show that 13.7% of Americans are either out-of-work, or marginally attached to the work force.


Since 1988, when over 62% of Americans over the age of 16 were employed, until President Barack Obama took office in 2009, the ratio remained relatively consistent. The percentage of the population in the workforce since March 2009 quickly dropped 4 to 5 percentage points and has hovered around 58% since this president took office. It has yet to exceed 60% for even one month. That means that four-out-of-10 people aged 16 or older are currently not working. The last time Americans saw such a large number not working was in the transition years of Ronald Reagan’s first term.


Today the BLS states that over 12 million people remain unemployed. The likelihood that a pronounced economic recovery will reduce these numbers in any dramatic way is highly unlikely. With the implementation of the ACA there is little that will do anything to spur economic growth or increase wages and take-home pay. It will – as a matter of course – have the opposite effect.


As of September 25th, Investors Business Daily has reported that there are 313 documented entities that have specifically acted to reduce the number of hours of part-time employees due to regulations associated with Obamacare. Locally this list includes Howard Community College, Republic Foods, the city of Ocean City, Royal Farms and Chesapeake College in Maryland.


Whether one believes in the federal control of the healthcare system or not, it is indisputable that the effects of implementing the ACA will be harsh on those looking to get a full-time position. Those looking for work will be more likely to work two jobs instead of one. They will spend less time with their families and their quality of life will suffer. Low income families and workers will be much less likely to become financially independent or successful in the president’s new “part-time” America.


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