Tags: Obamacare | part-time | unemployment | workers

Labor Market Changing Fast, Thanks to Obamacare

By Patrick Watson   |   Wednesday, 13 Mar 2013 07:53 AM

Last week, we learned the government’s official unemployment rate was 7.7 percent in February, an improvement from 7.9 percent the previous month. Total employment was up by 236,000. Good news? Not if you look deeper than the headline.

February’s improvement came mostly from a large increase in the number of part-time jobs. You may recall that back in December I predicted employers would reduce their full-time headcount in response to Obamacare (see Mass Obamacare Layoffs Coming Next Month). The process is unfolding right on schedule.

A Gallup survey released March 7 found that 10.1 percent of workers are “underemployed” in part-time jobs but wanting full-time work. Some hold multiple part-time jobs.

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Obamacare mandates large employers provide health insurance for anyone working more than 32 hours per week. The requirement takes effect in January 2014, but the hours are calculated from the year before, i.e. right now.

This is why national chain stores and others are reducing hours. With insurance companies hiking rates, providing even basic coverage to low-wage workers simply costs too much. Obamacare is driving a major shift to a mostly part-time work force.

We also have to recognize other factors. Much of the Millennial Generation, now in its 20s, drifts in a stream of temporary and part-time “gigs.” Many, having known nothing else in their adult lives, regard this as normal. They’re ahead of the curve — because this is exactly what “normal” will look like in the future.

The linear model of long-term, full-time careers with the same company is disappearing quickly, outmoded by a fast-changing globalized economy. Any U.S. job that can be reduced to a set of repeatable steps will be either part-time or moved overseas.

No wonder, then, that Baby Boomers are retiring as soon as possible — if they can afford it. The labor market they knew all their lives is gone and not coming back. Obamacare is accelerating changes that would happen anyway.

I suspect most people understand that progress is inevitable. They just wish it would unfold a little more slowly. No such luck. Get used to change, because it’s happening now.

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