Posted by Thomas Nephew on November 19th, 2012
A number of companies — Papa John’s Pizza, Applebee’s, and Olive Garden/Red Lobster to name a few– have been loudly announcing their intentions to move workers from full-time to part-time status (less than 30 hours per week) as a political response to the relevant provisions of “Obamacare”, or the Affordable Care Act (ACA).*
This, in turn, has led to pushback and calls to boycott these businesses, and more power to that, I say. But any employer based health insurance plan was always going to create an incentive to shed as many covered, full-time jobs as possible, to be measured against the ability to get by with part-time employees instead. In this connection, the fact that it’s mainly been restaurant chains announcing this move is not surprising; I wonder just what percentage of a Papa John’s workforce was full-time in the first place.
Far more worrisome than a handful of loudmouth CEOs at the tip of the part-time economy iceberg are the many more below who may be quietly going about the same thing. The weakness of the recovery from the 2008 recession nearly gave us President Romney; part of that weakness has to do with full-time jobs being lost and replaced with part-time ones.
The trend to part-time jobs isn’t new — Wal-Mart has done this for years, mainly to get around the risk of overtime pay once a 40 hour week is exceeded; the degree to which workers can be replaced by automation surely also accounts for some of this trend.
But policy makers assume that the real world responds to incentives, and here was an incentive to respond to. Indeed, the incentive was all but announced with blinking neon lights; the option to limit coverage to full-time employees was explicitly pointed out by the Obama administration for those companies too dim to figure it out on their own. As a U.S. Department of Labor document in early 2012 emphasized:
…nothing in the Affordable Care Act penalizes small employers for choosing not to offer coverage to any employee, or large employers for choosing to limit their offer of coverage to full-time employees, as defined in the employer shared responsibility provisions.
Similar guidances were issued by the IRS and the Health and Human Services Department.
While there were any number of business journal articles from as early as 2010 suggesting cutting full-time jobs might be a consequence of or workaround for “Obamacare,” the issue was also addressed by that abandoned tribe in the health care debates: single-payer, Medicare for all advocates such as Physicians for a National Health Program (PNHP). PNHP web site articles noted both the likely business response to Obamacare and the superiority of single-payer in this respect (and others).
So these days, boycottpapajohns.org may be single-payer advocates’ best friend. As the web site puts it:
Obamacare is part of the problem. It doesn’t address costs and does precious little to improve the health care system. It’s a recycled Republican plan. [...] In addition to boycotting places like Papa John’s, we need to get businesses out of the health care system. We need single-payer health coverage.
* An admirable graphic about employer responsibility under the ACA was developed by the Kaiser Foundation. Note that penalties are per full-time employee.