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Obamacare Cost Uncertainty Part of Reason for So Many Part-Time Workers

Here's a follow up to yesterday's post on part-time workers and Obamacare. The Atlanta Federal Reserve asked employers about their mix of part-time and full-time workers. Since the recession, 25% have a greater share of part-time workers while only 8% have a lower share. 

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Atlanta Federal Reserve chart: Change in firms' mixture of part-time and full-time employees.
Atlanta Federal Reserve chart: Change in firms' mixture of part-time and full-time employees.

Employers said a major factor for hiring more part-timers is that compensation costs for full-time workers have increased relative to part-time workers. Obamacare's employer mandate happens to be just such an increase.

Atlanta Fed analyst, Ellen Terry sums up the survey's results [emphasis mine]:

Weak business conditions and the increase in the relative cost of full-time employees have been about equally important drivers of the increase in the use of part-time employees thus far. Thinking about the future, firms mostly cite an expected rise in the relative cost of full-time workers as the reason for shifting toward more part-time employees. So while there are some clear structural forces at work, a large amount of uncertainty around the future cost of health care and the future pace of economic growth also exists.

Economic theory states that when regulations and mandates increase the cost of hiring workers, demand falls. Based on the Atlanta Fed survey, Obamacare may be playing a significant role in keeping many Americans from finding full-time work.

[H/t James Pethokoukis]

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

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