Obamacare will turn full time jobs into part time

Obamacare will require large companies to provide health insurance for full-time workers. So a number of low-wage employers–restaurants, hotels, and retailers–are planning to limit workers to no more than 30 hours per week to avoid triggering the requirement.

So reports the Wall Street Journal: Health-Care Law Spurs a Shift to Part-Time Workers – WSJ.com. (subscription required)

What are we to think of companies that do this?  Do we blame them?  Do we blame the government?  Is this irresponsible exploitation of labor or an economic necessity?

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • SKPeterson

    It is a rational and reasonable response, what should have been an expected response by firms. The bet being made was that the economy would be humming along and firms would need the workers and their productivity at levels that would more than offset the additional costs of employing the worker. That hasn’t materialized, and it is probably not going to happen unless some other cost burdens diminish enough to offset the higher costs of hiring workers. I

    So, unemployment will probably increase, wage levels will continue to fall, the provision of healthcare and the costs of that provision will not improve, firm profits will be curtailed, and economic growth will be less than 2% for the foreseeable future using the GDP measure – and even negative according to other broader measures of the economy. I also wouldn’t be surprised if there isn’t more labor strife and associated economic dislocation as the unions are faced with companies no longer able to afford full-time unionized labor. The potential opportunities for political favoritism and cronyism will be rampant, and many firms will begin to shift more jobs to Right-to-Work states and foreign countries. Right-to-Work will probably also come under sustained assault. Winners: Proponents of Fascism, Lawyers, Government, Banks, Big Pharma, and Big Healthcare. Losers: Everyone Else and the Free Market.

  • SKPeterson

    It is a rational and reasonable response, what should have been an expected response by firms. The bet being made was that the economy would be humming along and firms would need the workers and their productivity at levels that would more than offset the additional costs of employing the worker. That hasn’t materialized, and it is probably not going to happen unless some other cost burdens diminish enough to offset the higher costs of hiring workers. I

    So, unemployment will probably increase, wage levels will continue to fall, the provision of healthcare and the costs of that provision will not improve, firm profits will be curtailed, and economic growth will be less than 2% for the foreseeable future using the GDP measure – and even negative according to other broader measures of the economy. I also wouldn’t be surprised if there isn’t more labor strife and associated economic dislocation as the unions are faced with companies no longer able to afford full-time unionized labor. The potential opportunities for political favoritism and cronyism will be rampant, and many firms will begin to shift more jobs to Right-to-Work states and foreign countries. Right-to-Work will probably also come under sustained assault. Winners: Proponents of Fascism, Lawyers, Government, Banks, Big Pharma, and Big Healthcare. Losers: Everyone Else and the Free Market.

  • James Sarver

    Those industries tend to demand flexibility in scheduling, making it very difficult to work two part time jobs that don’t conflict. The result: chronic underemployment. Thanks to Obamacare for once again pretending to make things better while making them worse. Just wait until we have to actually start paying for all this nonsense.

  • James Sarver

    Those industries tend to demand flexibility in scheduling, making it very difficult to work two part time jobs that don’t conflict. The result: chronic underemployment. Thanks to Obamacare for once again pretending to make things better while making them worse. Just wait until we have to actually start paying for all this nonsense.

  • Tom Hering

    A decade ago, the regional company I worked for was bought by a national company, and my 40 hour job was reduced to a 31 and 3/4 hour job, with loss of all benefits (32 hours or more was full time in Wisconsin). So tell me again how Obamacare is causing the private sector to behave in ways it wouldn’t otherwise.

  • Tom Hering

    A decade ago, the regional company I worked for was bought by a national company, and my 40 hour job was reduced to a 31 and 3/4 hour job, with loss of all benefits (32 hours or more was full time in Wisconsin). So tell me again how Obamacare is causing the private sector to behave in ways it wouldn’t otherwise.

  • http://theoldadam.com/ Steve Martin

    Of course the private sector does what it deems necessary to survive.

    But Obamacare is much worse. It places our lives at the mercy of govt. workers and panels that will be looking to save a buck, with little or no regard for the individual and their wishes.

    Big govt. = more mess and less freedom.

    The Founders were right.

    The ash heap of history is paved with good intentions.

  • http://theoldadam.com/ Steve Martin

    Of course the private sector does what it deems necessary to survive.

    But Obamacare is much worse. It places our lives at the mercy of govt. workers and panels that will be looking to save a buck, with little or no regard for the individual and their wishes.

    Big govt. = more mess and less freedom.

    The Founders were right.

    The ash heap of history is paved with good intentions.

  • Trey

    Tom because this is going to happen on a mass scale.

    To Veith’s question, it’s their business they built it so they can employ whomever they want for how long they want.

  • Trey

    Tom because this is going to happen on a mass scale.

    To Veith’s question, it’s their business they built it so they can employ whomever they want for how long they want.

  • Tom Hering

    Sorry Steve @ 4, but I’ve been through a period of disability, and I found “govt. workers and panels” to be well-trained professionals who did indeed show regard for me and my wishes. The only real problems I had were with private sector companies who contracted with the government to provide services. They wouldn’t lift a finger they didn’t have to – they were only interested in doing the minimum necessary to submit my case for full payment.

  • Tom Hering

    Sorry Steve @ 4, but I’ve been through a period of disability, and I found “govt. workers and panels” to be well-trained professionals who did indeed show regard for me and my wishes. The only real problems I had were with private sector companies who contracted with the government to provide services. They wouldn’t lift a finger they didn’t have to – they were only interested in doing the minimum necessary to submit my case for full payment.

  • http://homewardbound-cb.blogspot.com ChrisB

    When the price of gas suddenly doubled, everyone had to find ways to reduce costs wherever they could. When the cost of labor suddenly rises, you expect the same. The Law of Unintended consequences appears like clockwork.

  • http://homewardbound-cb.blogspot.com ChrisB

    When the price of gas suddenly doubled, everyone had to find ways to reduce costs wherever they could. When the cost of labor suddenly rises, you expect the same. The Law of Unintended consequences appears like clockwork.

  • Mary

    My mother in law broke her hip while living at a nursing home. She was taken to the ER. Months later (it takes that long to get anything from Medicare) we found that they wouldn’t cover her bills. My husband spent several hours on the phone with them. He was directed to eight different supervisors to figure out why it wasn’t covered. The eighth person he spoke with figured out that an incorrect code had been placed on her file at the ER. Her response when my husband asked how to get that changed? She laughed at him and said “man you’re screwed, nothing we can do on this end, and the hospital won’t change it, you’re out of luck” Thank you very much government health care. Now we are putting that kind of attitude on steroids.

  • Mary

    My mother in law broke her hip while living at a nursing home. She was taken to the ER. Months later (it takes that long to get anything from Medicare) we found that they wouldn’t cover her bills. My husband spent several hours on the phone with them. He was directed to eight different supervisors to figure out why it wasn’t covered. The eighth person he spoke with figured out that an incorrect code had been placed on her file at the ER. Her response when my husband asked how to get that changed? She laughed at him and said “man you’re screwed, nothing we can do on this end, and the hospital won’t change it, you’re out of luck” Thank you very much government health care. Now we are putting that kind of attitude on steroids.

  • Julian

    If corporations are people, they should have moral scruples like people.

    Just because it’s a corporation’s prerogative to deny coverage to its employees doesn’t make it justified behavior.

    Just because a company can legally exploit its workers doesn’t make it not exploitation.

  • Julian

    If corporations are people, they should have moral scruples like people.

    Just because it’s a corporation’s prerogative to deny coverage to its employees doesn’t make it justified behavior.

    Just because a company can legally exploit its workers doesn’t make it not exploitation.

  • Cincinnatus

    Tom,

    The plural of “anecdote” is not “data.”

    SKPeterson is right: it’s a rational and reasonable–and eminently predictable–response. While it would be great if corporations provided full health coverage for every single one of their employees, most of them can’t afford to do that. Nor should they be obliged to do so. I know I’ll be accused of callous insensitivity here, but it’s the truth: if you, as an employee, didn’t want a job that doesn’t provide health coverage, then you shouldn’t have taken the job. Even Starbucks offers health insurance.

    Corporations can’t be expected to add an additional $5000+ to the effective salaries of all their minimum-wage employees.

    I’m absolutely no apologist for multinationals, but can you imagine if Wal-Mart had to offer full benefits to every single cashier, McDonalds to every burger flipper? Of course, it’s appealing from the perspective of social reform. But even Wal-Mart can’t afford an instant increase in their costs to the tune of billions of dollars. It ain’t happening. Call them unscrupulous, call them heartless, but this is simple economic fact. And we haven’t even mentioned the impact this will have on small businesses (e.g., many small shops like my father-in-law’s auto body repair garage don’t offer their few employees insurance because they can’t afford it; i.e., my FIL could quite possibly be out of work after this–or he’ll have to “pretend” to be a part-time worker).

    Bottom line: while it’s trendy to rant about the ruthless world of corporatism, the system isn’t designed to produce the results Obama wants. Most people and corporations operate “rationally” within the rules of the game as it’s presented to them; morals are simply an irrelevant consideration in this context. It will never cease to boggle my mind that supposedly savvy politicians still haven’t figured this out in America after almost a century of (largely failed) social engineering.

  • Cincinnatus

    Tom,

    The plural of “anecdote” is not “data.”

    SKPeterson is right: it’s a rational and reasonable–and eminently predictable–response. While it would be great if corporations provided full health coverage for every single one of their employees, most of them can’t afford to do that. Nor should they be obliged to do so. I know I’ll be accused of callous insensitivity here, but it’s the truth: if you, as an employee, didn’t want a job that doesn’t provide health coverage, then you shouldn’t have taken the job. Even Starbucks offers health insurance.

    Corporations can’t be expected to add an additional $5000+ to the effective salaries of all their minimum-wage employees.

    I’m absolutely no apologist for multinationals, but can you imagine if Wal-Mart had to offer full benefits to every single cashier, McDonalds to every burger flipper? Of course, it’s appealing from the perspective of social reform. But even Wal-Mart can’t afford an instant increase in their costs to the tune of billions of dollars. It ain’t happening. Call them unscrupulous, call them heartless, but this is simple economic fact. And we haven’t even mentioned the impact this will have on small businesses (e.g., many small shops like my father-in-law’s auto body repair garage don’t offer their few employees insurance because they can’t afford it; i.e., my FIL could quite possibly be out of work after this–or he’ll have to “pretend” to be a part-time worker).

    Bottom line: while it’s trendy to rant about the ruthless world of corporatism, the system isn’t designed to produce the results Obama wants. Most people and corporations operate “rationally” within the rules of the game as it’s presented to them; morals are simply an irrelevant consideration in this context. It will never cease to boggle my mind that supposedly savvy politicians still haven’t figured this out in America after almost a century of (largely failed) social engineering.

  • http://facebook.com/mesamike Mike Westfall

    Why in the world do we expect employers to provide health care plans and insurance in the first place?

    I can imagine that originally it was an inducement to attract workers, then government incentivized the practice (but why?), and now it’s an entrenched entitlement and we have been conditioned to think that employer provided health care is a God given right and employers who don’t “assume the position” are somehow exploitive and immoral.

    Why can’t we all buy what we need ourselves from the wages our employers pay us?

  • http://facebook.com/mesamike Mike Westfall

    Why in the world do we expect employers to provide health care plans and insurance in the first place?

    I can imagine that originally it was an inducement to attract workers, then government incentivized the practice (but why?), and now it’s an entrenched entitlement and we have been conditioned to think that employer provided health care is a God given right and employers who don’t “assume the position” are somehow exploitive and immoral.

    Why can’t we all buy what we need ourselves from the wages our employers pay us?

  • Cincinnatus

    Mike Westfall@11:

    A good question. Companies originally began offering health insurance as an inducement to attract superior talent. If companies wish to make this investment, then by all means. But I see no reason why they should be required to do so in any circumstances.

    The problem–and the response from critics–of course is that private health insurance is prohibitively expensive for most individuals. But why is this so? In short, the problem is the government (as usual), and it can be boiled down to this simple formulation: mandatory first-dollar coverage. Imagine how expensive your car insurance would be if it covered (by government mandate) fuel fill-ups and routine oil changes–and everything else–with little-to-no out-of-pocket cost to you. Then you have some idea of why private health insurance is so costly in America.

    No so long ago, “health insurance” was called “hospital insurance”–for a reason.

  • Cincinnatus

    Mike Westfall@11:

    A good question. Companies originally began offering health insurance as an inducement to attract superior talent. If companies wish to make this investment, then by all means. But I see no reason why they should be required to do so in any circumstances.

    The problem–and the response from critics–of course is that private health insurance is prohibitively expensive for most individuals. But why is this so? In short, the problem is the government (as usual), and it can be boiled down to this simple formulation: mandatory first-dollar coverage. Imagine how expensive your car insurance would be if it covered (by government mandate) fuel fill-ups and routine oil changes–and everything else–with little-to-no out-of-pocket cost to you. Then you have some idea of why private health insurance is so costly in America.

    No so long ago, “health insurance” was called “hospital insurance”–for a reason.

  • Steve Billingsley

    What, a 2700 page monstrosity of a bill that no one really read before voting on, that creates lots of new bureaucracy and has all sorts of political exceptions built in to enable passage (Louisiana Purchase, Cornhusker Kickback anyone) has unforeseen effects? I’m SHOCKED, SHOCKED!!!

    I am in favor of universal healthcare coverage and think it can work in conjunction with the private sector (Switzerland and Australia come to mind) and think that our system is a bloody mess. But how anyone can think that Obamacare is well-designed and will actually do a fraction of what it promises? If so, I have some ocean front property I would like to sell you in Kansas.

  • Steve Billingsley

    What, a 2700 page monstrosity of a bill that no one really read before voting on, that creates lots of new bureaucracy and has all sorts of political exceptions built in to enable passage (Louisiana Purchase, Cornhusker Kickback anyone) has unforeseen effects? I’m SHOCKED, SHOCKED!!!

    I am in favor of universal healthcare coverage and think it can work in conjunction with the private sector (Switzerland and Australia come to mind) and think that our system is a bloody mess. But how anyone can think that Obamacare is well-designed and will actually do a fraction of what it promises? If so, I have some ocean front property I would like to sell you in Kansas.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    They wouldn’t lift a finger they didn’t have to – they were only interested in doing the minimum necessary to submit my case for full payment.

    This in essence is the problem with third party payment. They don’t have to satisfy the customer because he isn’t paying. They just have to document x,y and z to someone who can’t possibly know or care as much as the patient himself. So, no matter how bad the service they provide, they still get paid. Whereas an individual can contest it far more easily by withholding payment from the get go.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    They wouldn’t lift a finger they didn’t have to – they were only interested in doing the minimum necessary to submit my case for full payment.

    This in essence is the problem with third party payment. They don’t have to satisfy the customer because he isn’t paying. They just have to document x,y and z to someone who can’t possibly know or care as much as the patient himself. So, no matter how bad the service they provide, they still get paid. Whereas an individual can contest it far more easily by withholding payment from the get go.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Why can’t we all buy what we need ourselves from the wages our employers pay us?

    Because we have top of the line healthcare that is very expensive. Most people can’t afford it. Those who can afford it are healthier (statistically) and don’t need it as much. Also, people like their needs for free so they can spend their money on discretionary things.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Why can’t we all buy what we need ourselves from the wages our employers pay us?

    Because we have top of the line healthcare that is very expensive. Most people can’t afford it. Those who can afford it are healthier (statistically) and don’t need it as much. Also, people like their needs for free so they can spend their money on discretionary things.

  • Dr. Luther in the 21st Century

    @#3 I don’t think it is a radical change more of an amplification that is going to occur.

  • Dr. Luther in the 21st Century

    @#3 I don’t think it is a radical change more of an amplification that is going to occur.

  • DonS

    Mike @ 11 and Cincinnatus @ 12: I believe the practice of employers offering health insurance benefits became widespread during WWII because of wage freezes imposed by the federal government to tamp down inflationary pressures brought on by wartime shortages. Fringe benefits were not counted as wages, so they became common means of differentiating companies and attracting workers. Of course, this long ago example of government edict inducing unanticipated behaviors in response to the edict conforms to what is beginning to happen under Obamacare.

    The fact that these behavior changes are “unanticipated” by the political geniuses who devise these utopian government plans is the amazing part, of course. Social utopians really believe that they can meddle endlessly in the private sector without consequence — that no one will respond to this meddling by taking action to avoid or minimize costly impacts. They always model these types of things — regulations and tax increases or decreases — statically, rather than dynamically, to take into account changes in behavior of those being regulated or taxed.

    Which is why tax increases never raise as much money as promised, tax decreases never cost the government as much money as promised, and regulations always reduce economic productivity in some manner.

  • DonS

    Mike @ 11 and Cincinnatus @ 12: I believe the practice of employers offering health insurance benefits became widespread during WWII because of wage freezes imposed by the federal government to tamp down inflationary pressures brought on by wartime shortages. Fringe benefits were not counted as wages, so they became common means of differentiating companies and attracting workers. Of course, this long ago example of government edict inducing unanticipated behaviors in response to the edict conforms to what is beginning to happen under Obamacare.

    The fact that these behavior changes are “unanticipated” by the political geniuses who devise these utopian government plans is the amazing part, of course. Social utopians really believe that they can meddle endlessly in the private sector without consequence — that no one will respond to this meddling by taking action to avoid or minimize costly impacts. They always model these types of things — regulations and tax increases or decreases — statically, rather than dynamically, to take into account changes in behavior of those being regulated or taxed.

    Which is why tax increases never raise as much money as promised, tax decreases never cost the government as much money as promised, and regulations always reduce economic productivity in some manner.

  • rlewer

    If health care insurance is too expensive for individuals to pay, why is it not too expensive for businesses to pay?

  • rlewer

    If health care insurance is too expensive for individuals to pay, why is it not too expensive for businesses to pay?

  • Cincinnatus

    rlewer@18

    Uh, it is in most cases. That’s the point.

  • Cincinnatus

    rlewer@18

    Uh, it is in most cases. That’s the point.

  • helen

    Big businesses which self insure have the clout to negotiate discounts for their employees that you cannot get as an individual. When I lost my very good company insurance, my routine office visits costs took a flying leap upward. God was merciful; I had no major health problems during the five years I was without insurance because the premiums were too high (IF I could have gotten insurance.)

  • helen

    Big businesses which self insure have the clout to negotiate discounts for their employees that you cannot get as an individual. When I lost my very good company insurance, my routine office visits costs took a flying leap upward. God was merciful; I had no major health problems during the five years I was without insurance because the premiums were too high (IF I could have gotten insurance.)

  • Aca

    Mike Westfall November 6, 2012 at 11:02 am

    Why in the world do we expect employers to provide health care plans and insurance in the first place?

    ———–

    I asked it myself. Who will pay health care to employers?

  • Aca

    Mike Westfall November 6, 2012 at 11:02 am

    Why in the world do we expect employers to provide health care plans and insurance in the first place?

    ———–

    I asked it myself. Who will pay health care to employers?

  • http://zumbaonline.webs.com zumba

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