Robert Samuelson says that we have a weak recovery, that employers are shifting from full-time to part-time employment, and the cause is the Affordable Care Act (ACA). This gives him a batting average of 333, pretty good for the Post.
The first part is undeniably true. This recovery is very weak compared to prior post-war recoveries. Of course that is not surprising to fans of economics and arithmetic. This recession was brought on by the collapse of a housing bubble, not the Fed raising interest rates to slow inflation. That meant that a recovery would be more difficult.
In a normal recession, high interest rates discourage car buying and home building and buying. This means when the Fed lowers interest rates to boost the economy, there is a large amount of pent-up demand in these sectors which provides a powerful boost the recovery.
That was not the case with this downturn as some of us have been saying for the last 5 years (here, here, and here). As they say in Washington, if you repeat something long enough, and it happens to be true, the Washington Post will eventually notice. So yes, Robert Samuelson is right, this is a weak recovery and it is easy to explain by an inadequate stimulus. There is simply no source of demand in the economy that is capable of replacing the more than $1 trillion in annual demand (construction and consumption) that was being generated by the housing bubble.
On the second point Samuelson is suffering from a serious lack of evidence. According to the Bureau of Labor Statistics in 1992, when the economy was slow creating jobs coming out of the 1990-91 recession, involuntary part-time workers accounted for 5.4 percent of total employment. In the first six months the share has been 5.5 percent. Given the far greater severity of the current downturn, it would seem a bit of stretch to describe this 0.1 percentage point increase as implying some sort of sea change in employer behavior.
For those looking at temp employment, we're hovering near the 2000 levels. There's not much of a story here either, or at least not a new story.
Since Samuelson is wrong on the second point -- employers have not shifted to part-time in a way that is not a predictable result of a weak economy -- he is inevitably wrong on the third point: employers are not cutting hours to avoid the employer sanctions under the ACA. Just to be sure, Helene Jorgenson and I checked the percentage of workers who are working 26-29 hours, just under the 30 hour cutoff for the employer penalty. It actually is slightly lower in 2013 than in 2012. So much for the huge shift in hours.
There is one final point worth noting. Samuelson points to surveys of employers where they say they had adjusted their employment patterns because of the ACA. Employers do not always do as they say. It is fashionable in some circles to repeat the job-killer ACA mantra. Many employers fall into this category.
Many have claimed that it deterred employment in 2010-2012, years when the sanctions did not even apply. If demand warranted increased employment, there would be no reason not to hire workers in these years because of the ACA. Since roughly 3 percent of workers leave their jobs every month (half voluntarily and half involuntarily) they would have little reason to fear that they would be stuck with more than 50 workers in 2013, when the sanctions were first scheduled to apply, if their goal was to avoid the sanctions.
Of course if they were not hiring because of fears of the ACA, then they presumably would have increased average hours to meet the demand for labor. There is no evidence of any substantial increase in hours, above pre-recession levels, in any major sector of the economy. In short, it does not appear as though employers were acting in a way consistent with what they were saying.
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