I am un-surprised that part-time job growth outpaced full-time job growth; no one needed a crystal ball for that one. But the steep drop of full-time jobs strongly suggests that the growth in part-time jobs is not merely corollary but rather causal. Why? Because July 1 marks the beginning of the mid-point of the calendar year. Under the Affordable Care Act (ACA), the shortest measurement period allowed with which to count the labor hours of employees and thereby determine their eligibility for health insurance coverage with their employer (at least 30 hours of labor per week) is six months. Accordingly, companies with January 1 health insurance renewal dates could wait no later July 1 to begin counting hours worked by their employees.
The data reported by the Bureau of Labor Statistics (www.bls.gov) strongly suggests that many employers began filling job openings with part-time workers and also began converting some measure of full-time work to part-time status so as to avoid cost exposure under the ACA (see chart by Tyler Durden at ZeroHedge). Additionally, it is clear from the growth of revenue in the temporary labor industry so far this year (Q2 numbers released at mid-month should tell the story in detail) that companies are working to avoid the risk of even having an employee.
It is no secret that the benefits of having an employee have greatly faded. The erosion of the at-will doctrine, an EEOC with expansive definitions of “manager”, the Napoleonic code application to Title VII claims, I-9 audits through the roof, and a rampant NLRB have all conspired to make having an employee very unattractive. High skill and knowledge workers can be placed under independent contracts, temporary agencies can provide the bulk of what most companies need in terms of basic skill and knowledge workers (heck, more than half of them have college degrees). The ACA did not cause this shift in the labor force, but it was certainly catalytic with regards to June’s employment numbers.
It remains to be seen if the announcement last week of the postponement of the employer insurance mandate until January 2015 will arrest the trend line of part-time job growth. I am not optimistic. Pushing compliance off a year does not alter the strategic landscape for employers. Besides, the decision to post-pone the date was arbitrary on part of the federal government. Who is to say the government won’t move the date to mid-2014 if the political heat gets too hot?