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Friday, August 16, 2013 12:54 PM

Minimizing ObamaPain: Economic Distortions at the 50-Employee Margin

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In response to Is Obamacare Really Responsible for Rise in Part-Time Employment? If So, Why Doesn't Average Weekly Hours Show Just That? I received an interesting email from a reader "Robert" who owned a family business with close to 50 employees.

Hello Mish

Having been in a family steel fabricating business for eight years, I can tell you that rather than take on new employees, we always added hours rather than employees when things were active.  We ran for years with 42 employees through good times and bad. Even though we sold the business about 6 years ago, I can tell you that if I were still running things today, rather than go over 50 employees, my decision would have been to add overtime hours to meet higher demand. This increase in hours would have tended to offset the trend in some other industries to cut hours to less than 30 hrs/week leading to the observed flat trend of Average Weekly Hours in data provided by the BLS.
Minimizing ObamaPain

And so it goes. Some industries hire temps, some increase hours (especially companies near 50 workers), and some reduce hours and hire more workers.

The net effect has been a huge shift towards hiring more part-time workers, but the distortions are not uniform.

Everyone does what they can to minimize ObamaPain

Mike "Mish" Shedlock

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