The ObamaCare Economy: More Jobs, Fewer Hours, Less Pay
With the implementation of the Affordable Care Act (Obamacare), one of its most lasting and far-reaching (and unintended) consequences is already emerging. Employers who have numerous, relatively low-pay employees are changing their practices to employ these workers only 30 hours per week. This keeps them below the threshold for full-time employment, and relieves employers of the economic burden of paying for health insurance — or paying a penalty for not doing so.
This seemingly innocuous change is already sweeping through the restaurant and hospitality industry, but this will just be the first of many service industries that will adopt this new policy. What this means to the American workforce is that many more people will find jobs, but they will all earn less than before, by twenty-five percent (compared with pay for working a 40-hour week).
The 40 hour workweek was created during the Industrial Revolution in Britain two centuries ago. Industrial production and large factories had already changed working life and conditions. The working conditions were poor, the work hard, and both the health and morale of the workers suffered from brutally long hours (10-16 hours per day, often 6 days per week). Child labor was also common.
Starting in 1810 and building by 1817, the concept of three-day parts evolved — eight hours for work, eight hours for recreation and eight hours for rest. This was considered an ideal day, but the concept was not quickly adopted. Employers were slow to move from 12 to 10 hour days, and it was not until almost 50 years later (1860s) that the eight-hour day and 40 hour week started to grow more widespread.
This practice migrated across the ocean to America with many other British and European practices, but didn’t become fully entrenched until the American industrial movement followed the British one — from brutally hard, long days and weeks to shorter, more humane ones. Forty-hour weeks became the standard, especially when unions became much more involved. This 40-hour benchmark also became the determinant for when workers would be paid “overtime” pay.
Now, as just the first of many unintended consequences of Obamacare, the 40 hour week will begin to fall prey to the new, 30 hour (non-full-time) workweek. Employees will earn 25 percent less in their weekly paycheck, further worsening the plight of the middle class. While 25 percent more workers will be needed and additional jobs may result, everyone will be proportionally worse off. A second job will be needed to simply “make ends meet” for workers who were accustomed to living from 40 hours pay.
Ultimately, it will be no surprise if the government’s heavy hand doesn’t intervene further and pass a law (or more likely, a proclamation of some agency in the Obama Administration) that makes the use of a shorter workweek, “for the express purpose of avoiding Obamacare regulations,” illegal. Once government begins to dictate more and more of the terms of everyday Americans lives, there is nowhere to draw the line.
Remember this prediction: the 30 hour workweek will become a new normal, and will cause the number of jobs to increase (to the glee of the Obama bureaucrats). However, their joy will be short-lived when it proves to worsen the plight of the already struggling middle class. They will not only earn one-quarter less, but also they will not be covered by employer health care plans, further adding to the cost of government provided health care. The middle class will be hard hit, since the areas likely to adopt this new, shorter workweek, are some of the largest employers — today’s service economy.
When bureaucrats who don’t understand how business works in a free enterprise society start meddling, unintended consequences like this emerge, grow and worsen. Welcome to the Obama economy, where everyone is becoming poorer, and they all need more “handouts” — everyone that is, except the growing cadre of government workers, whose unions diligently protect their incomes while they are dictating how middle-class Americans live their lives.
- Why we need to demand a shorter work week (workers.org)
- 4-Day Workweek / Employees Love It, But Businesses ? (jobmarketmonitor.com)
- Obamacare will create at least 50 million jobs. (lunaticoutpost.com)
- The 60-Hour Workweek Is a Myth (inc.com)
- ObamaCare Starting to Hit the Poor (americanclarion.com)