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Sunday, January 26, 2014 2:27 PM


Mid-Level Manager at Target Responds to Mish Part-Time Job Thesis


My part-time job thesis is easy to describe:

  1. Obamacare exacerbated the already ongoing trend towards more part-time employment by lowering the definition of full-time employment to 30 hours. 
  2. As a result, companies reduced employee hours from 32-34 to 25-29. 
  3. In turn, workers picked up extra part-time or weekend jobs with minimal hours, to help make ends meet.

A few days ago, Target made the claim it would not reduce employee hours because of Obamacare. See Target Drops Healthcare Coverage for Part-Time Workers, Claims No Reduction in Hours.

My response was that Target was disingenuous, and that the only way it would not reduce hours due to Obamacare is if it already did so well in advance.

A Home Depot employee asserted that Home Depot did just that (see Anecdotes From Home Depot Employee), but I had not heard from Target employees yet.

Today I heard from a Mid-Level Target manager (MLTM) who wishes to remain anonymous. MLTM writes ...
Hello Mish

I appreciate your blog and felt that I should contribute at least what I have observed in my time at Target. I'm an exempt store employee (middle management) and I can attest to the fact that Target has been controlling hours of hourly employees as you have suggested.

This is a trend that began well before the recent press release regarding health insurance for part time workers. Policy isn't explicitly stated, but part-time positions have a 12 month auditing period. Average weekly hours are tracked in order to not exceed the part time threshold.

It is common to have part time team members scheduled to cover full time shifts or responsibilities. The two most striking aspects of this effort are on the team members and on shoppers.

The vast majority of team members have such limited hours that to survive they must either have other employment. Some have other full time employment, most an additional part time position. Alternatively some of our part time positions are filled by retired workers or college students.

Turnover, attendance, and work quality and customer support are greatly affected by these facts.

The customer impact, as many of your readers may have noticed, is that there are not enough team members to assist or process transactions at any given time. This frustrates shoppers and makes lower cost internet shopping experience all the more attractive.

A downward spiral of falling sales, fewer hours/team members, further falling sales, and increased operational costs from Obamacare and other regulations pushes costs up when the consumer is buying less from stores and more from on-line vendors.

Anecdotes do not constitute data, but the overwhelming number of similar emails I receive sure rings true.

Competition in the form of "Retail Sales Cannibalization" is intense.

Moreover, the huge, ongoing discrepancy between the establishment survey and the household survey also suggests my thesis is correct.

For details, please see Employment vs. Jobs Discrepancy based on December 2013 Data, released in January.

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

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