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Tuesday, September 09, 2014 1:45 PM

Average Workweek Back at Pre-Recession Levels: What About the Obamacare Effect?

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A chart of  hours worked shows the average work week has returned to pre-recession levels.

Average Work Week

Moreover, note that the number of part-time jobs has been relative steady in the recovery.

Employed Usually Working Part Time

What About the Obamacare Effect?

The Obama administration uses the above charts to make the claim Obamacare did not lead to a reduction in hours worked.

Obama is wrong.

For detailed analysis, please consider The Worst Job Stat Continues To Get Even Worse by Jed Graham at Investor's Business Daily.

Amid all the focus on boosting the minimum wage and legislating living wages, virtually no one seems to have noticed what is happening to the workweek in low-wage industries.

Since December 2012, private industries paying up to about $14.50 an hour have added, on net, 972,000 nonsupervisory jobs with an average workweek of a mere 17.7 hours, an IBD analysis finds.

That doesn't mean new employees are being hired for such few hours. Rather, it reflects a combination of reduced hours in existing jobs and short workweeks for newly created jobs.

Overall, in these low-wage industries which employ 30 million rank-and-file workers, the average workweek shrank to 27.3 hours per week in July, an IBD analysis shows. That's the shortest workweek on record, except for this past February, when mid-month blizzards wreaked havoc during the Bureau of Labor Statistics survey week.

The conventional wisdom among economists is that there's been no apparent shift to part-time work and that ObamaCare's employer mandate hasn't led to shorter workweeks.

But shorter hours clocked by nonmanagers in low-wage industries are being obscured because the rest of the workforce is now clocking a longer average workweek than even before the recession started.

For low-wage industry workers, on the other hand, the recovery in the workweek from a then-record low 27.5 hours in mid-2009 began to reverse in the latter half of 2012, and it's been pretty much all downhill since then.

Evidence points to ObamaCare as an important factor in the shrinking workweek.
Tale of Two Recoveries

At first glance it may appear the above chart is in conflict with the chart of people usually working part time. However, there is no discrepancy.

The BLS defines part time as less than 35 hours. Low wage industries had a lot of part-timers working 32 hours.

Under Obamacare, the threshold of part-time jobs is 30 hours. Obama made that change on purpose to force more businesses to offer healthcare.

Instead, busiunesses cut hours. It was the hours of the already part-timers that got cut, and that explains why there was no spike in part time employment.

The Obamacare effect is very real as the above chart shows.

Mike "Mish" Shedlock

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