White House ObamaCare Math: 29.5-Hour Week = 30, No Impact

Investor's Business Daily

The White House sees no sign that ObamaCare is affecting Americans' work hours. But its data have a problem: Government economists count workers limited to 29.5 hours as 30-hour-per-week workers.

That's no small rounding error in this case.

Employers, as AFL-CIO President Richard Trumka recently said, are "restructuring their workforce to give workers 29- and-a-half hours " to dodge ObamaCare's health coverage mandate.

Anecdotes abound about employers cutting workers' hours to 29.5 or even 29.75 — just below the 30-hour workweek at which ObamaCare penalties kick in for employers who don't offer health care coverage. (Eleven are listed below.)The White House used Current Population Survey data to show that ObamaCare)," the interviewers are told.

That means the White House has no clue how many of the 5-million-plus workers who are reported to be clocking 30-hour weeks are actually working 29.5 hours, though there are surely more than there used to be.

Off The Books

ObamaCare's impact on the work hours of people clocking 30 to 34 hours per week is of particular interest because these workers are already considered part-time under the Labor Department definition. Thus, their hours could be cut below 30 per week without any official rise in part-time employment.

Other analysts, including the Center For Economic and Policy Research and Bloomberg News, have made the same oversight as the White House.

As a result, all of these widely cited analyses overestimate the number of workers clocking 30 hours or more and underestimate how many are working just below 30 hours.

Even with the rounding problem, the CPS numbers do offer evidence of ObamaCare's impact on the workweek.

The data show a clear trend of fewer people working 30- to 34-hour weeks in their main jobs.The change is not large, but it should not be discounted, especially since the number is padded with workers whose hours have fallen to as few as 29.5 hours.

The declines also have come even as the total number of people working has grown by about 2 million from a year ago.

On a year-to-year basis, the seasonally unadjusted data show that the number of workers clocking 30 to 34 hours has fallen in seven of the past 10 months. Further, a close look shows that the other three months aren't really exceptions: The ranks of 30- to 34-hour workers rose only because of a sudden drop in full-time work.

Take July: The number of workers clocking at least 35 hours a week was up by less than 1.5 million vs. July 2012. In comparison, June's year-over-year rise topped 2.4 million. More vacations (to be expected as the economy recovers), government furloughs and typical survey volatility are possible explanations.

For these and other reasons, workforce-wide CPS data are of limited use in gauging the impact of the Affordable Care Act employer mandate on work hours.

The best way to see whether ObamaCare is squeezing workers' hours is to look at data on industries where wages are low and fewer workers had insurance before the health care reform law.

IBD has been doing such an analysis, which shows that low-wage earners' hours have taken a hit.

In industries where pay averages up to about $14.50 an hour, the workweek is back near the 27.4-hour record low seen at the depth of the recession in 2009. The evidence points to a meaningful ObamaCare impact on hours.

Employers cutting workers to 29.5 or 29.75 hours range from fashion retailer Forever 21 to the Middletown Township Public Schools in New Jersey.

Middletown is one of 351 employers on IBD's list of employers that cut work hours to limit fines imposed by ObamaCare. In addition to Middletown, nine other employers explicitly said hours would fall to the 29.5- or 29.75-hour levels that the government counts as 30 hours a week. They are Utah's Davis School District; Indiana's Eastbrook, Greencastle, North Harrison and Richland-Bean Blossom Community Schools; Pennsylvania's Lori's Angels home care and school districts East Penn and Susquenita; and Directions in Research, with call-center operations in Michigan.

Each entry on IBD's list is documented with links to news sources and public records.

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