Coyote Blog

Last year I predicted that the biggest economic story of 2013 would be the end of full-time work (due to Obamacare) in the retail service industry.  I seldom make predictions, but wrote that at the time because I was amazed that this shift to part time work was all we were talking about in the small business world, since for technical reasons in the law we had to have these changes in place in 2013, well before the 2014 start of the employer mandate.

The media world is finally catching up, particularly after recent jobs reports where the totality of net new job creation (and more) was in part time jobs.  Here is yet another story from the media finally noticing a business conversation that has been going on for almost a year:

Employers around the country, from fast-food franchises to colleges, have told NBC News that they will be cutting workers’ hours below 30 a week because they can’t afford to offer the health insurance mandated by the Affordable Care Act, also known as Obamacare.

“To tell somebody that you’ve got to decrease their hours because of a law passed in Washington is very frustrating to me,” said Loren Goodridge, who owns 21 Subway franchises, including a restaurant in Kennebunk. “I know the impact I’m having on some of my employees.”

Goodridge said he’s cutting the hours of 50 workers to no more than 29 a week so he won’t trigger the provision in the new health care law that requires employers to offer coverage to employees who work 30 hours or more per week. The provision takes effect in 16 months....

The White House dismisses such examples as "anecdotal." Jason Furman, chairman of the president’s Council of Economic Advisors, said, “We are seeing no systematic evidence that the Affordable Care Act is having an adverse impact on job growth or the number of hours employees are working. … [S]ince the ACA became law, nearly 90 percent of the gain in employment has been in full-time positions.”

But the president of an influential union that supports Obamacare said the White House is wrong.

"It IS happening," insisted Joseph Hansen, president of the United Food and Commercial Workers union, which has 1.2 million members.  "Wait a year. You'll see tremendous impact as workers have their hours reduced and their incomes reduced. The facts are already starting to show up. Their statistics, I think, are a little behind the time."

This has to be spin by the Obama Administration and not an honest belief.  There is no way they could have missed this:

In June, the household survey reported that part-time jobs soared by 360,000 to 28,059,000 – an all time record high. Full time jobs? Down 240,000.  And looking back at the entire year, so far in 2013, just 130K Full-Time Jobs have been added, offset by a whopping 557K Part-Time jobs.

I have written before that I think these changes are here to stay.  In some cases it is actually easier for businesses to stitch together full service coverage from part-time workers, as I discussed in this article at Forbes.

Yes, more evidence that the PPACA is ending full-time work in the American retail service sector

Circle K Southeast joined a growing list of national companies shifting workers to part-time status this week, in order to avoid paying Obamacare’s mandatory benefits, CBS-WTOC reports.

The alternative is to pay a $2,000 fine per fulltime worker who is not covered, leading Circle K to become the latest in a long line of companies to slice employee hours to avoid increased costs.

Here was my article several weeks ago in Forbes, though I have been predicting this since last year (when my own company started planning for the same change).