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Home Publications Blogs Beat the Press Obamacare Increased Voluntary Part-Time Employment, Involuntary Is Down

Obamacare Increased Voluntary Part-Time Employment, Involuntary Is Down

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Monday, 07 April 2014 19:59

Paul Solman seems determined to make me an optimist on the state of the economy, at least by comparison. Following the comments of Kristin Butcher, chair of Wellesley's economic department, his blogpost on the March jobs report dismisses the 192,000 job growth reported for March:

"That’s because, according to the survey of 60,000 households, roughly 170,000 more Americans of working age were added to the population in March, consistent with the number we add just about every month, and also consistent with the Census Bureau’s report that the U.S. population is growing at slightly more than 2 million people a year.But that would mean that the number of jobs added — 192,000 — just kept pace with the number of new people who needed them."

This comment misses the fact that not everyone works. The employment to population ratio (EPOP) is just below 60 percent. This means that for the EPOP to stay constant we need roughly 100,000 new jobs a month. In this context, the March numbers implied that we reduced the number of unemployed by roughly 90,000.

The other item on which I am more optimistic than Solman is part-time employment. He emphasized the rise in involuntary part-time as bad news. I looked to the rise in voluntary part-time as good news. While the number of people working part-time involuntarily did rise in March, it is still 240,000 (@ 3.0 percent) below the year ago level, and is fact well below the level for any month in 2013. These numbers are erratic and the March rise partly reverses a drop of 580,000 reported between December and February. In other words, there is no evidence in this series that the Affordable Care Act (ACA) is increasing the number of people involuntarily working part-time as the post suggests.

On the other hand, the number of people who are voluntarily working part-time increased by 230,000 in March and is 515,000 above its year ago level. One possible effect of the ACA would be to give workers the option to work part-time who previously may have had to work full-time to get health care insurance. Since workers can now get insurance through their exchanges rather than their jobs, many may choose to work fewer hours to spend more time with their families or doing other things. This is especially likely for parents of young children.

In short, the data to date would support the view that Obamacare is having a positive effect on the labor market by giving workers more choices. But we will need many more months of data before we can say this with any confidence.

Comments (1)Add Comment
Tis the Season
written by Larry Signor, April 08, 2014 12:09
There is a seasonal cycle to many part-time jobs. One would expect a rise in voluntary part-time employment at this time of year. The ACA may be enhancing this, but I like to think of the ACA as a stimulus plan. Many people who previously had insurance are able to buy it for much less. We all know what happens to the extra dollars...they create demand...which creates jobs...

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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