ObamaCare Fuels Sharp Workweek Drop In 4 Industries

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.

  • It’s not hard to find industry groups with an unprecedented drop in work hours. Among retail bakeries, home-improvement stores and providers of social assistance to the elderly and disabled, the workweek for non-managers 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. 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.

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 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.

Permanent Temps

  • A Reuters survey in June found that 27 of 52 Wal-Mart 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.

*Modified from an Investors.com article
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