You know how we've been told that all these large employers are slashing their workers' hours from full time to part time to avoid having to offer them health insurance? Surprise. It's not true.
One of the best known cases was Darden Restaurants plan to do so, but they have relented in the face of overwhelming public pressure.
Ducking the increased cost of Obamacare by reducing the number of full-time employees is both bad PR and bad business, it appears. The Darden restaurant group (Red Lobster, Olive Garden), that made headlines with plans to test cutting full-time employees to avoid insuring them or paying fees, announced plans to jettison the program after a wave of bad publicity and worker dissatisfaction impacted earnings projections.
Darden is now saying that its 45,000 full-time employees — just one quarter of the company’s 180,000 strong workforce — will not have their hours cut, and will have access to benefits.
Douglas Holtz-Eakin, president of the right-leaning American Action Forum, predicted matters will only worsen. “The ACA will contribute to slower job growth,” Holtz-Eakin told the hearing.Now that think tanks like his have made this a 'fact', it can be repeated as truth by anyone needing to make the point.
“The law will lead to a greater reliance on a part-time workforce, as companies will not be mandated to provide health insurance benefits to part-time workers.”
Investors Business Daily, one of the most consistently vitriolic anti-Obama sites on the Internet took the Obama Administration's temporary relaxation of the employer mandate as an opportunity to get in a dig:
The Obama administration said Tuesday that it won't penalize employers for failing to provide health insurance in 2014, after a string of employers slashed jobs and work hours to avoid ObamaCare costs.They repeat the canard, but don't back it up with data.
But many businesses with moderate-wage employees — including retail, restaurant and hospitality companies — do not provide coverage or offer more-limited plans that don't meet ObamaCare's standards. Many such employers have slashed jobs or reduced workweeks below 30 hours — the law's standard for full-time employees. Temp employment has soared as another way to sidestep ObamaCare costs.
Notably, a large and growing number of local governments blame the ObamaCare mandate for cuts in jobs and hours.
A new study from the Center for Economic Policy Research has shows however, that employers are not actually rushing to cut employee hours below thirty to be under the threshold.
“Fortunately, it is possible to test whether employers are actually reducing hours below the 30-hour hreshold. The Current Population Survey (CPS) provides monthly data on workers usual weekly hours. We used the CPS to compare the first four months of 2013 with the first four months of 2012. We looked at the numbers and percent of workers who reported working 26-29 hours a week.”The bottom line:
That's when they discovered that just 1 million people work those limited hours.
“While the sanctions in the ACA may provide some marginal incentive to reduce worker hours below the 30-hour cutoff, other considerations in setting worker hours appear to be far more important.”
More than half of Americans -- 160 million people – currently get their health insurance through an employer. The law is designed to expand that number, and to help more people get health insurance through marketplaces called exchanges in each state.
While there may certainly be instances of individual employers carrying through with threats to reduce their employees’ hours to below 30 to avoid the sanctions in the ACA, the numbers are too small to show up in the data,” wrote CEPR's Helene Jorgensen and Dean Baker.There has been much criticism of framing the law based on full time workers, that perhaps it should have been based on total personnel hours or another number that wouldn't have this 'devastating effect'. Today we learned according to the New York Times that Obamacare may be the salvation to cities such as Detroit struggling to fund healthcare for their employees. As 'Obamacare' approaches and we continue to get more data, it seems that every point against it is fading, giving Republicans even less ammunition to wage their shutdown of the government.