Thursday, November 29, 2012

A major change in the US employment model?


More and more businesses are reported to be adjusting the hours of work of their employees, converting as many as possible from full-time status (i.e. up to 40 hours or more of work per week) to part-time (i.e. less than 30 hours of work per week).  This is thanks to a provision of Obamacare that takes effect next year, which will require companies with 50 or more full-time employees to purchase medical insurance - or pay a fine for not doing so - for every one of them.  Needless to say, it's a lot less expensive for companies to simply hire more part-time workers, and make sure that none of them exceed the 30 hour work limit every week.

Warren Meyer (who's doing the same thing in his own business) had this to say:

... this is going to be an ENORMOUS change in the ... service sector.  I have talked to a lot of owners of restaurants and restaurant chains, and the 40-hour work week is a thing of the past in that business.  One of my employees said that in Hawaii, it was all the hotel employees could talk about.   Many chains are working on mutli-team systems where two teams of people working part-time replace the former group of full-time employees.  2013 is going to see a lot of people (who are not paid very well to begin with) getting their hours and pay cut by 25%.  At the same time that they are required, likely for the first time since many are relatively young, to purchase health insurance.

It will be interesting to see what solutions emerge.  My bet is that it will become standard for people in the service sector to work two different jobs for 20-25 hours each with two different companies.  This will be a pain for them, but allow them to keep their income up.  The hard part may be coordinating shifts between companies.  For example, a company that divides their shifts into mon-tue-wed vs. thu-fri-sat cannot share employees with one who divides their shifts between morning and afternoon.  If given time, I would guess that just as the mon-fri workweek emerged as a standard, companies may adopt standard ways of dividing up the work weeks for part-timers, making it easier for schedules to mesh.

There's more at the link.  Recommended reading.

I think this is going to make it much harder for people to earn a decent living.  It's all very well to say that people will have to work two part-time jobs to make the same amount of money;  but there are millions and millions of unemployed people out there.  I would think that if more part-time jobs open up, they're also going to compete for them, so that many workers will end up with only one part-time job, earning much less money per week than they did before in full-time employment.

So Obamacare runs headlong into the law of unintended consequences - and millions are likely to be worse off as a result.  Furthermore, if this becomes as widespread a reaction to Obamacare as appears likely at present, expect the politicians to try to 'tweak' Obamacare to solve the problem - thereby producing yet more unintended consequences, and probably making everything worse still.

Peter

8 comments:

Anonymous said...

"law of unintended consequences"? No; he knows exactly what he is doing. Worse, he is succeeding.

Old NFO said...

Going to link to this, Good points!!!

Shrimp said...

And the voters screamed, "Give it to me. Harder. Faster. More!"

And they got it, for four more years at least.

Billll said...

On the brighter side the change to a 30 hour work week will make it easier for people to take two such jobs to make ends meet. The resultant 60 hour work weeks with no paid benefits will put us back to where we were in about 1850 when people worked dawn to dusk with no benefits. Keeping the current pay scales will result in a 30% increase in take-home pay which will allow people to buy their own health care or not as they see fit, less the tax penalty if you don't.

Kevin said...

And the call will go out from the halls of Congress, the SEIU et al: "LOOPHOLE!" they will shout, and beat their breasts crying "But that's not what we intended! Those mean, nasty, profit-driven CAPITALISTS are just driven by their GREED!"

Lather, rinse, repeat.

Chris said...

It is definitely not unanticipated. This will just give them an excuse to expand the coverage.

Graybeard said...

It has been said by many who have read the real details that it was designed to fail - designed to collapse and be replaced by a government-run single payer system. The British NHS (now famously sending handicapped or ill babies to death) is our goal.

Quartermaster said...

I'm not sure Zer0 knows what he is doing. If he, or his minons, thought this would work then they are utterly ignorant. The Soviet Union collapsed because their system ignored human nature and this will do the same for the same reason.