Measuring What Didn't Happen: Did Obamacare Cause an Increase in Part-Time Jobs? No Says Ritholtz, and Reuters; Yes, Says Mish

A friend sent me an article in Reuters today that claims Little evidence yet that Obamacare costing full-time jobs.

One in five businesses in the service sector think President Barack Obama's signature healthcare reform has hurt employment at their firms over the last three months, a National Association of Business Economics survey showed on Monday.

But there is little discernible impact in the employment figures released in recent months, including the September numbers out on Tuesday. The number of people with part-time jobs who want full-time work, for example, was essentially flat in September at 7.9 million.

The number of part-time workers spiked in 2008, well before Obamacare was enacted, and has been slowly falling as a share of total employment since 2010. In September people working part time because they could not find full-time work made up 5.5 percent of the employed, unchanged from August. The spike in 2008 and the steady drift downward since then suggests the elevated level of part-time workers is more likely due to the economy's weakness.

Did Obamacare Cause an Increase in Part-Time Jobs?

Barry Ritholtz at the Big Picture Blog says "no" in his October 7 post Did Obamacare Cause an Increase in Part-Time Employment?

A reader emailed the following question about this weekend’s WaPo column (ObamaCare: Investing Advice for Senator Ted Cruz):

"How can you make investment decisions about future returns in light of Obamacare driving so many workers to part time status?"

Ahhh, a classic bit of misdirection — an assumption built into a question. The first step in answering that is to verify the reality of that assumption: Has Obamacare actually caused an increase in part-time employment?

As you can see in the black line below, the number of part time workers spiked because of the Great Recession. It peaked and began to slowly reverse before the ACA [Affordable Care Act - Obamacare] was even passed.



No, there does not appear to be an increase caused by Obamacare.

Measuring What Didn't Happen

For now, let's assume the above chart from the Economic Policy Institute is correct. Does that imply there was no Obamacare effect?

Of course not, and Ritholtz should know better.

Even if the EPI chart is correct, it does not show what would have happened had Obamacare not passed.

Realistically, to determine the Obamacare effect, we need to measure what we didn't see (which is what would have happened in the absence of Obamacare).

I am inclined to believe what corporate CEOs are saying given strong evidence they did what they said.

Reuters reported "Many businesses polled by the NABE said they were holding back on hiring due to the costs imposed by the law. The survey also showed 15 percent of service sector firms planned to shift to more part-time workers due to Obamacare."

There is massive evidence that businesses increased part-time hiring due to Obamacare. There is massive evidence of other economic distortions as well.

Obamacare Economic Distortion Synopsis

October 10, 2012: Prepping for Obamacare, Olive Garden and Red Lobster Cut Workers' Hours; Are Other Companies Doing the same?

October 20, 2012: Mish Obamacare Mailbag: Expect More Part-Time Jobs

February 02, 2013: Obamacare in Action: Retail Workweek Hits 3-Year Low

February 19, 2013: Opting Out of Obamacare (the Unaffordable Health Care Act); Not Even Labor Unions Want It

May 3, 2013: Obamacare Affects Part-Time Employment Yet Again; Nullification Bill Passes South Carolina House; Analysis of Healthcare Penalty Rates

May 20, 2013: Obamacare Premiums 47% Higher But Deductibles 27% Lower Than Grandfathered Health Plans; Obamacare Lies

June 21, 2013: Obamacare Effects Hit Local Governments, Small Businesses, Temp Staffing Agencies; Chicago Dumps Retirees Into Obamacare

July 8, 2013: Trends in Full and Part-Time Employment; Obamacare Job Double Counting and Other Economic Distortions

July 12, 2013: "Win-Win" Situation for Employers to Not Offer Healthcare to Part-Time Employees; Now Ain't That Special?

OK Mish, Why Doesn't the EPI Chart Support Your Case?

1. Perhaps the Obamacare distortions were masked over by other hiring trends.
2. Perhaps the BLS data will be revised away later, showing what really happened.
3. Perhaps the assumption we made earlier, "the EPI chart show by Ritholtz is an accurate reflection of the current state of affairs", is in fact, a bad assumption.

Let's explore point number three. Please consider a chart of BLS data, taken from the St. Louis Fed (Fred) Website.

Employed, Usually Work Part Time 2000-2013



Let's hone in on that for a closer look.

Employed, Usually Work Part Time 2008-2013



Questions and Answers

Q.What would the chart look like without Obamacare?
A. Better

Q. Was the Obamcare hiring effect delayed until 2012?
A. Probable. That is when CEOs started complaining. That is when numerous restaurants cut back hours.

Q. Will we see BLS revisions that make the reported data look worse?
A. Probable

Q. Does the Economic Policy Institute chart reflect reality?
A. The chart from the St. Louis Fed is a closer approximation, but revisions are likely

Q. Has Obamacare actually caused an increase in part-time employment?
A. Absolutely.

That is what the chart suggests (even before expected BLS revisions). That is what CEOs say. And that is what plain common sense suggests in the first place (even though we will not understand the full impact for years, if ever).

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com