There are no solutions, only trade-offs.
Nearly all of the remaining provisions of the new health care law go into effect next January, including one that requires businesses with 50 or more full-time employees to pay for their health care or pay a penalty.
Some businesses may already be making personnel changes to save money when that provision of the Affordable Care Act kicks in. One option on the table: shifting full-time workers to part time.
Duane Davis thinks that’s what happened to him. He’d probably still be stocking clothing at the Juicy Couture store in New York City if he still got 30 to 40 hours a week of work like he used to. The work environment “was very cool,” he says, and he liked his co-workers.
But Davis quit because he couldn’t get enough hours. If he’d stayed and worked 30 or more hours a week, he would have been eligible for employer-paid health care starting next year. But earlier this year, Davis says, he was told he could work no more than 23 hours.
And the math is simple:
Rob Wilson, president of the temp agency Employco, says he’s observing similar shifts happening across his business.
“We’re seeing it quite a bit,” he says. “Instead of saying, ‘I want one person for 40 hours a week,’ [employers are saying], ‘I’ll take two people for 20 hours or 25 hours a week.'”
Wilson says the health care issue is also reshaping his own business. A typical temp working full time makes a gross profit of about $3,000 a year for Employco. But the cost to insure that person would come to $2,900.
That means just $100 in profit per employee before he advertises or pays his recruiters and his payroll department. “You can’t survive on $100,” Wilson says, “so you really have to pass that cost on.”
In other words, Wilson will have to charge his clients more — if they are willing to pay. And from his perspective, this basic math adds up to a big labor market problem. “Your underemployed population in America is just going to go up dramatically,” Wilson predicts.
I don’t doubt the intentions of liberal agendas, I just doubt their success.