Updates
July 7, 2013: temporary jobs becoming a permanent fixture in the US, AP is reporting --
Hiring is exploding in the one corner of the U.S. economy where few want to be hired: Temporary work.
From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them — about 12 percent of everyone with a job.
Hiring is always healthy for an economy. Yet the rise in temp and contract work shows that many employers aren't willing to hire for the long run.
The number of temps has jumped more than 50 percent since the recession ended four years ago to nearly 2.7 million — the most on government records dating to 1990. In no other sector has hiring come close.
Driving the trend are lingering uncertainty about the economy and employers' desire for more flexibility in matching their payrolls to their revenue. Some employers have also sought to sidestep the new health care law's rule that they provide medical coverage for permanent workers. Last week, though, the Obama administration delayed that provision of the law for a year.July 6, 2013: mainstream media is starting to point out what I've been saying for quite some time -- ObamaCare is going to result in a shift from full-time to part-time employment; and, where possible, a shifting of health care costs from the corporation to the individual; from the state to the federal government. The Wall Street Cheat Sheet:
Mulligan is the author of The Redistribution Recession: How Labor Market Distortions Contracted the Economy in which he argues that features varying from minimum wage laws to tax rates deepened, or very possibly caused the recession by distorting incentives and causing massive job loss.
Similarly, he argues in his piece for Economix that Obamacare will make employees and employers alike opt for part-time hiring, a feature which could profoundly change the way American industry operates.
While he points out that a “lack of health benefits and the lower pay for part-time work have traditionally discouraged people from taking part-time jobs rather than full-time jobs,” now, he says, “Because part-time workers will be eligible for the subsidies except in the rare instances in which their employer covers them, full-time work will no longer carry the advantage of access to health insurance. That by itself will encourage more people to seek part-time work.”
Essentially, the law could have the unintended consequence of manipulating a marketplace predicated on having full-time workers to reach maximum productivity to switch largely to part-time employment, since the incentives will now be greater. In line with the argument advocated in his book, this is going to discourage firms from hiring full-time at a massive cost to the taxpayer.
Whereas he shows that a full-time position with health insurance costs an employer $56,000 a year, and leaves the employee with about $34,000 in pretax salary, now, thanks to a subsidy offered in President Obama’s healthcare law, part-time workers will be able to earn essentially the same wage ($33,908), and have the $12,658 dollar difference paid for by the United States Treasury. This will create a phenomenon, he argues, that will incentivize fewer work hours since the cost to the employer is the same, and taxpayers will be stuck to make up the difference.
Original Post
The O'Bama legacy: only 47% of "American" adults have full-time jobs.
Part-time jobs surge to new all-time high.
College course catalogs are being re-edited as we speak. New offerings include:CNBC is reporting that the growth in part-time jobs accounted for the entire job growth in June, while full-time hiring actually decreased. The largest sector of growth: bartenders and fast-food restaurants.
- Analytical Hotel Housekeeping
- Comparative Burger Flipping
- Deconstructing Lattes 201
- The Tao of the Walmart Greeter
- "How Can I Help You?": Cashier Dialectics in the Postmodern Age
This was predictable.
The question is whether this is a one-month anomaly, or whether this is the beginning of tectonic change in the way America hires workers.
There were two important data points.
The first important data point: the added jobs were all part-time. ObamaCare mandates part-time jobs if companies are to survive. Each new permanent worker will cost companies $5,000/year in health car premiums (or more) vs $2,000/employee penalty.
The second important data point: the sector that will be most affected by ObamaCare is the fast-food industry.
It certainly appears the fast-food industry is adjusting quickly to the new reality.
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