Obamacare pushes millions of U.S. small businesses to scramble for ways to comply with the law – and keep expenses manageable. One of routes they take is to lean more heavily on part-timers and temps. But is it good for the U.S. economy? What options do you have as an employer?
The rise of part-time economy
The U.S. Bureau of Labor Statistics (BLS) June 2013 unemployment report revealed that there were 195,000 jobs created in June 2013; the numbers seem encouraging, especially given the fact that unemployment dropped to 7.4 percent, compared to 8.2 percent last year.
However, did you know that most of the new jobs created are part-time jobs?
Keith Hall, a senior researcher at George Mason University’s Mercatus Center, said “Over the last six months, of the net job creation, 97 percent of that is part-time work.”
Unfortunately, those statistics didn’t reflect the worrying trend of underemployment, which is a big problem when you are talking about economic recovery.
One of the latest articles from the U.S. Chambers of Commerce voices concerns on the underemployment trends: In June 2013 alone, the number of Americans who are underemployed in part-time or temporary positions jumped to 14.3 percent; in addition, the number of involuntary part-time works increased by 322,000.
Indeed, part-time and temp works are a trend right now – a worrying trend, that is, driven mainly by a decision small business owners need to make to respond to a controversial health care law, the Affordable Care Act, which basically requiring companies with more than 50 full-time employees to provide health insurance to them.
Not complying with the law will result in fines and tax penalties – the routes some small businesses are ready to take.
The death of full-time jobs
The above is just the tip of the iceberg. There are bigger problems underneath, and one of those problems is the trend for businesses to rely heavily on part-time employees. This is happening in many sectors, most notably restaurants and retailing.
Even state and local governments are cutting work hours for many employees, preparing for the Obamacare implementation.
Those trends lead to a bigger – more interesting, I must say – trend: The death of the full-time jobs.
Throughout the U.S. some facts lead to the same conclusion: Small business owners are not interested in hiring full-time workers.
Takeaway
So, is Obamacare causing the rise of the part-time economy? Perhaps; but apparently, the main street businesses show the tendencies of hiring part-timers and temps more than before, as well as reducing the work hours of the existing full-time workers. Those are the facts we simply can’t deny.
One thing for sure, Obamacare will remain the talk among U.S. small businesses. Let’s see how things go.
Photo credit: Photocapy
