Diving Deeper into the Nexus Between Part Time Jobs & ACA

Mike Shedlock takes me to task for our discussion on ACA/Part time Jobs: Did Obamacare Cause an Increase in Part-Time Employment?  which led to this response Measuring What Didn’t Happen: Did Obamacare Cause an Increase in Part-Time Jobs? No Says Ritholtz, and Reuters; Yes, Says Mish.

I was pushing back against the “ACA caused all of the part time work” meme, and did not put a lot of thought or care into the work. I plead guilty to overgeneralizing and imprecision in my answers — two errors I hope to clarify with this post. At the same time, I will throw the same charge back at Mish, noting he too over-generalized, as well as made several statements that are unsupported by data, and are at best mere guesses presented as facts.

First my Mea Culpa:

Yeah, I was sloppy in my response to the emailer, posting the EPI chart and mostly leaving it at that. I thought the timeline was self explanatory in terms of the broadest accusations  made.

What I should have written more precisely was this:

“The claims that Obama Care caused all or nearly of the huge increase in part time work is utterly belied by the timeline. The surge in part time employment began a full 3 years before ACA became the law, and 5 years before the SCOTUS said it was legit. The huge increase in part time work, beginning some time in 2007, was coincidental with the worst recession since the Great Depression and a spike in unemployment to over 11%. This was on top of the collapse in Home Construction employment circa 2006. As such, it is hard to imagine that all of the blame being heaped upon ACA is accurate.”

That response is accurate — the spike in Part Time work happened before Obama was even the nominee for president.

But there is another level of analysis, one that I failed to discuss, and that Mish simply got wrong, and it is this: We really don’t know what the actual impact of ACA/Obamacare is in the real world with any degree of accuracy. There simply isn’t enough reliable data to draw any firm supportable conclusions.

We can surmise, hypothesize, assume, guess, and make estimates. We can argue, debate, persuade, engage in all manner of rhetorical flourishes.We can share anecdotes, tell personal stories, construct narratives.

What we cannot do is know with any degree of accuracy what the actual impact in the real world is. I have a suspicion the ACA has had less impact than many people have claimed. We know that it does not apply to companies that have less than 50 employees. We also know it has little impact on companies with much more than 50 employees, as they are locked into ACA regardless. Sure welfare queens like Wal-Mart (medicaid, foodstamps, welfare)  and McDonalds may have been cutting hours back — but that’s been their standard operating procedure for decades. McDonalds actually counsels even full time employees how to get welfare and public assistance.

Did some CEO/CFOs say it did? Yes, they did, but lets be blunt — these are the same corporate psychopaths who claim that unexpected bad weather in Winter impacts retail sales. Really, whoever could have ever foreseen snow in Minnesota in February!  Any investor knows never to rely on what a CEO says, as they are professional prevaricators as a group — they would blame their mothers for a miss if the analysts were dumb enough to buy it (and many are).

Consider the distribution curve of companies that might be affected by the law: The fat part of the curve would likely be those firms near 50 employees — anywhere from 40-60 — who might be adjusting their payrolls to stay under that 50 people bogey. And firms just over it could shed people to get out from under the ACA requirements. If anyone has an accurate way to quantify that, I’d like to see it; even some basis for an intelligent a guess would be superior to most of what passes for analysis on this subject.

But that is a tiny part of the dispersion of company sizes. As the Census data shows, of 27,281,452 firms employing some 120,903,551 people. Of this list, there are 526,307 firms that have 20 to 99 employees, and employ 20,684,691 workers. I’d like to see their data as well.

My own personal anecdote: I work with a small band of pirates in my own firm, which has no obligation to provide health care, as we are way, way under 50 people. But we do so because 1) We want to recruit and attract the best talent; 2) We are in a competitive marketplace; 3) We are like a family and want to take care of our own.

I cannot imagine those three reasons are unique to our firm. So even companies in the 40-60 “zone” may or may not see an impact relative to ACA mandates.


We all are occasionally guilty of imprecision, faulty arguments, bad assumptions.

I see nothing in Mish’s analysis that proves that ACA has had an impact. We simply do not know what the impact is yet.

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