ObamaCare Toll Told In 4 Industries' Data

Investor's Business Daily

Anyone who insists ObamaCare employer penalties aren't having a meaningful impact on work hours simply hasn't looked closely at the evidence.

In a private economy with 114 million workers clocking 34.4 hours a week on average, it's easy to miss important changes.

What feels like a wave to modest-wage workers getting hit may appear to be a mere ripple from an altitude of 40,000 feet.

After all, 1.4 million workers could lose an 8-hour shift and it would shave just six minutes off the average workweek.

But it's not hard to find industry groups with an unprecedented drop in work hours since ObamaCare became law.

Among retail bakeries, home-improvement stores and providers of social assistance to the elderly and disabled, the workweek for nonmanagers has fallen to record-low levels — by far.

At general merchandise stores, department stores and discounters, the rate at which the workweek has fallen since early 2012 is way off the charts relative to prior data going back to 1990.

Historic Decline

This historic and simultaneous shift in hours worked across multiple industry groups has occurred just as a sizable incentive for reducing hours was set to take effect, and amid a multitude of reports that companies are altering their employment practices to dodge ObamaCare fines.

In other words, the industry data, the incentives and the anecdotes match up pretty perfectly.

The industries listed above are among the most logical to test for an ObamaCare effect because the average workweek has been above, or at least close to, 30 hours — the point at which ObamaCare makes employers liable for health coverage.

In assessing whether ObamaCare is hitting work hours, it's also logical to look at industries that 1) feature modest-wage jobs requiring limited specialization; 2) have a high percentage of jobs at firms with at least 50 full-time-equivalent workers — the point at which ObamaCare's mandate kicks in; and 3) don't have a large share of workers who are undocumented, because they are ineligible for ObamaCare, giving employers no incentive to cut their hours.

Since the end of 2011, the workweek for those assisting the elderly and disabled has shrunk by 4.8%, from 29 hours to 27.6 in June, the lowest back to 1990.

The nonprofit Area Agency on Aging of Western Arkansas took the "drastic step" of cutting employee hours so that all 500 aides and drivers now work a maximum of 28 hours per week. Lori's Angels in Schuylkill County, Pa., cut the hours of all 30- to 40-hour workers to 29.5 and is now hiring only part-timers.

Half-Time Baked

The average workweek at retail bakeries has plunged 7.7% since the start of last year, from 29.8 hours to 27.5 hours.

Krispy Kreme Doughnuts (KKD) said in September 2012 that 1,300 employees, about 35%, lacked employer coverage but could be entitled to it under ObamaCare.

The company said compliance costs would likely be below $5 million, before "any mitigating actions ... to reduce the cost of the benefits ... (or) the number of employees subject to the new requirements.

Of 500 employees Krispy Kreme added in the year ending Feb. 3, at least 80% were part-time — a clear shift for a firm whose store staffing was more than 60% full-time.

At general merchandise stores, nonsupervisors' workweek has shrunk 7.5% since the start of 2012, from 32.2 hours to 29.8.

Permanent TempsA Reuters survey in June found that 27 of 52 Wal-Mart (WMT) stores contacted were hiring only temporary workers, who might not be around long enough to trigger employer penalties. Temps' share of Wal-Mart's workforce has surged from 1%-2% at the start of 2013 to "fewer than 10%.

One might have expected the housing rebound to partly reverse, or at least stem, a slide in the workweek at retail home centers. Instead, after stabilizing in 2011, average weekly hours for non-managers have fallen another 4.7% since the start of 2012, from 32 hours to 30.5.

Lowe's (LOW) announced in January that it would hire 9,000 permanent part-time workers.

Wal-Mart and Lowe's have cited non-ObamaCare reasons for their hiring shifts.

But the sharp fall in the workweek across multiple industries as employer penalties loomed provides powerful evidence of ObamaCare's impact on hours. And it's likely happening in a variety of other low-wage industries — as restaurant, movie theater and parking garage operators, among others, have acknowledged.

View Comments (10)