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Economy Inundated With Part-Time Workers

Economists divided on whether Obamacare to blame

Over the last five years, the number of people who wanted full-time jobs but worked part-time has more than doubled, rising to 2.75 million in June 2013 from 1.1 million in January 2008.

That has raised the question of whether employers are hiring more part-timers so they won't have to provide health insurance to people who work 30 hours a week or less, which is the threshold for a full-time worker under the Patient Protection and Affordable Care Act, also known as "Obamacare."

"Obamacare increases the cost of full-time employment," said Cato Institute Senior Fellow Mike Tanner, who has written a book on Obamacare. "It's only logical that some employers would seek to avoid the increased cost by reducing full-time employment and hiring part-time workers instead."

Beginning in 2015, Obamacare requires employers with 50 or more full-time equivalent employees to provide health coverage for all their full-time employees or pay an annual penalty ranging between $2,000 and $3,000 per employee.

Obamacare’s definition of a full-time equivalent job is 30 or more hours per week during an average month. It is based on the prior 12 months of work.

One economist and some think tank scholars point to the increased number of part-time workers being more of a sign of a slow recovery than having anything to do with the new health care law.

"When we see that the number of involuntary part-time workers more than doubled, that's yet one more indication of the severity of the damage caused by the financial crisis," said Michigan State University Economics Professor Charles Ballard, in an email. "The fact that the number of involuntary part-timers is essentially unchanged from Sept 2011 to June 2013 indicates that, despite continuing gains in overall employment, the labor market is still not nearly as strong as most of us would like it to be."

The number of part-time workers seeking full-time work peaked at 2.76 million in Sept. 2011, according to the U.S. Bureau of Labor Statistics.

Alan Barber, spokesman for the Center for Economic Policy and Research, pointed to part-time employment increasing from 2008 to 2009 before Obamacare passed. Barber said that part-time employment for the first four months of 2013 was lower than it was for the first four months of 2012.

"All together, there seems to be very little evidence that the ACA has led to a big increase in part-time workers over full-time workers," he said.

Elise Gould, director of health policy research at the Economic Policy Institute, a left-leaning think tank, said the spike in part-timer workers wasn't attributable to Obamacare.

She said when President Barack Obama pushed off the employer mandate that it provide insurance for full-time employees to 2015, it meant that the basis for hours worked when determining full-time workers wouldn't start until 2014.

"If there was a response, you wouldn't be seeing it now," Gould said. "There is no rational reason for employers to be cutting work hours for a mandate that doesn't take place for another year and a half."

For an employer with 35 full-time workers (30 hours a week or more) and 20 part-timers (24 hours per week, 96 hours per month), those 20 part-time jobs are the equivalent of 16 full-time jobs. So the employer in the example would have 51 full-time equivalent workers, according to CPEhr, a human resources consulting firm in Los Angeles.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

MichiganVotes: New Bill Starts Discussion Of Medicaid Expansion Alternatives

Senator introduces 'free market alternative' to Medicaid expansion

Sen. Patrick Colbeck, R-Canton, has introduced the first of two bills aimed at finding a free-market alternative to Medicaid expansion.

The stated goal of the legislation is to increase access to quality care without expanding government.

In the press release announcing the measure, the legislation, Senate Bill 459 and a yet to be introduced companion bill, is described as a "patient-centered solution" offered in place of Medicaid expansion.

On Thursday, Sen. Colbeck presented his plan to a Senate workgroup that's seeking a solution to Michigan's Medicaid expansion issue. This workgroup was set up by Senate Majority Leader Randy Richardville, R-Monroe, after he refused to immediately take up House Bill 4714, the Medicaid expansion bill that passed the House with Democrats providing most of the "yes" votes along with 28 Republicans.

Gov. Rick Snyder wanted the Senate to pass the bill quickly, but Sen. Richardville didn't bring it up for a vote because a majority of Senate Republicans didn't support it.

The administration of President Barack Obama wants states to expand Medicaid to accommodate the implementation of Obamacare. It is using billions in up front federal dollars as an enticement for states that do so.

Sen. Colbeck's measure would not expand Medicaid. Michigan would not qualify for the money being offered by the Obama administration if his bill was enacted.

Gov. Snyder is holding town hall meetings around the state in an attempt to stir up support for some form of Medicaid expansion. However, Gov. Snyder isn't calling it "Medicaid expansion." He's calling it, "Healthy Michigan," and more recently, "Medicaid reform."

Taking his cue from Gov. Snyder’s choice of words, Sen. Colbeck had Senate Bill 459 drafted. It would be Medicaid reform without expansion.

"We made a case for this," Sen. Colbeck told Capitol Confidential, referring to his presentation to the Senate work group. "Now it will be up to them. But this was just the first step. I think the next step will be to have the Senate Fiscal Agency look it over and I'd like to have a national policy research center have input on it as well. We want to get this in juxtaposition next to the other plans."

Jack McHugh, senior legislative analyst with the Mackinac Center for Public Policy, said the legislation, as currently drafted, injects some free market ideas into Michigan’s ongoing health care debate.

"The underlying cause of medical inflation is third-party payment systems that mean consumers don't have skin in the game, because it's always someone else paying the bills," McHugh said. "The bill looks like an effort to break that dynamic by removing regulatory obstacles to direct, contractual relationships between doctors and families via service plans with low monthly costs. Plus, it would use high-deductible insurance policies to cover non-routine, catastrophic expenses.

“It's ambitious to try this at the state level — perhaps too ambitious — and it's probably not possible under an Obamacare regulatory regime," McHugh continued. "Obviously this is bigger than just the Obamacare Medicaid expansion and, if nothing else, may stimulate some interesting and constructive conversations."

Sen. Colbeck explained the companion bill that goes along with Senate Bill 459.

"That bill takes the existing Medicaid enrollees and puts them in a primary care plan," he said. "A Health Savings Account (HSA) part is wrapped in with this. The hope is to use state money to provide better care and prime the pump for a very robust primary care market in Michigan."

According to a Sen. Colbeck news release, the bill would provide a "regulatory infrastructure that would enable a low cost, high quality care, free market environment within the confines of the Affordable Care Act (ACA) [Obamacare]."

"We need to stop talking about expanding a government program that doesn't work and start talking about ways to expand affordable care to all of our citizens," Sen. Colbeck said. "We can use this as an opportunity to put in place a free market based system that will not only accomplish the stated objectives of Obamacare but will also establish Michigan as a destination state for employers seeking quality, affordable health care for their employees."

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.