The Numbers Are In: Obamacare Increased Percentage of People Working 26-29 Hours a Week

08/26/2013 12:00am

Helene Jorgensen

Okay, all of you socialist nationalized health care loving Obama backers are going to have to own up to the evils of the Affordable Care Act (ACA). We now have the full six months of data for the first half of 2013. This is the period when employers thought they would be subject to sanctions for not covering workers who put in 30 hours a week or more. (The administration announced the suspension of this provision on July 2.) 

It turns out that the percentage of workers who are putting in 26-29 hours (just under the 30-hour cutoff) is up. The share went up from 0.61 percent of the workforce in 2012 to 0.64 percent of the workforce in 2013, an increase that corresponds to slightly more than 40,000 workers who have work schedules that put them just below the threshold as shown in the table below.

Usual Weekly Hours
  2012 2013
0 hr 0.07 0.07
1-19 hrs 8.97 8.69
20-24 hrs 1.39 1.37
25 hrs 1.78 1.81
26-29 hrs 0.61 0.64
30 hrs 3.03 3.12
31-34 hrs 1.78 1.79
35 hrs and up 75.37 75.79
hours varied 7.01 6.74

Source: Authors’ analysis of Current Population Survey.

This may look like it is confirming exactly what opponents of the ACA warned against. Employers are responding to the threat of sanctions and cutting back workers’ hours, exactly as several prominent business owners had promised they would do.

However a closer examination shows that the data don’t quite support this story. The percentage of workers putting in 25-29 hours is up, but so is the percentage of the workforce that puts in 35 hours a week or more. In fact, the share of the workforce that reports working just over the limit, either at 30 hours a week or 31-34 hours a week, is up also.

It turns out that the big declines are in the percentage of workers who put in 1-19 hours a week, 20-24 hours a week, or who report that their hours typically vary. The data indicate that fewer workers are in these low or “hours varied” categories and more workers report falling into all the categories at 25 hours a week or above.

These changes are all small and mostly not statistically significant. They also reflect the influence of many factors other than Obamacare. But the data certainly provide no evidence supporting the claim that the shortening of workweeks has been a widespread phenomenon.

Just to be clear, it is likely that the 30-hour sanction cutoff will have a modest but measurable effect on hours through time as employers adjust schedules and new businesses open. And any movement away from employer-based insurance will eliminate an important overhead cost that discouraged firms from shortening hours and hiring more workers.

Some would view this as a positive development since the United States is currently an outlier in that workers put in far more hours on average than they do in other wealthy countries. Many workers would value more time off in the form paid vacations, family leave or paid sick days. However it was unreasonable to think that employers would suddenly move to restructure their workplace in large numbers just to avoid the relatively modest sanctions associated with the ACA. And the latest numbers indicate that the data agree with this assessment.

Notes on data:

1) Analysis of the Current Population Survey, Monthly Basic Data, Jan-Jun 2012 and Jan-Jun 2013.

2) Looks at everyone who reported usually working, including ‘hours varied’ and ‘0 hours’

3) Calculated only for main job

4) Excludes self-employed who are not incorporated and people working without pay

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