11 Sep 2014

Something Is Screwed Up in the Labor Market

Health Legislation 10 Comments

As part of my research on the Affordable Care Act (aka “ObamaCare”), I used the standard government statistics to look at Part Time Employment compared to Total Employment. Here’s the graph:

Now be careful, there was a change in definitions of “part time” in the mid-1990s, which is responsible for that spike. So arguably you might want to slide the chart down after that point, meaning that the ratio in recent years may not have surpassed the peak back in the early 1980s.

Either way, though, it is crystal clear that the relative growth in part-time work is not merely a standard recession phenomenon, since it is much larger now than it was after the dot-com crash. Whether to attribute any blame to the ACA (which has built-in incentives for employers to limit full-time employees) is debatable, but what seems uncontroversial is that the U.S. labor market is undergoing dramatic changes that do not bode well for the little guy.

10 Responses to “Something Is Screwed Up in the Labor Market”

  1. Scott D says:

    Oh, but Dr. Murphy, don’t you SEE? This is a GOOD thing. All those part time jobs are actually people that before would have been FORCED to get a full-time job to get health insurance. ACA lets them work less and enjoy the finer things in life. Now if we could just get a bill passed for universal income no one would EVER have to work, ever AGAIN.

  2. Tel says:

    Part time work can be good if the wages are decent and cost of living isn’t too high. There’s a bunch of basics you are going to want: a place to live, food, water, electricity, Internet, transport.

    Once you have those, getting a faster car, or a bigger house doesn’t make such a big difference. It is subjective of course, but we could probably find an average point that most people are going to agree with… or at least put some bounds on it.

    • Gamble says:

      In the early 2000’s, I felt like I was getting ahead, therefore I worked as much as possible. 60-80 hours per week. Now I am more like you describe, its just not worth it. Simple and minimal is better.

      Wages have to be way up there to overcome taxes, middlemen, regulations and free loaders, otherwise its just not worth the extra effort.

      • Major.Freedom says:

        I’d work longer hours if I didn’t have to pay taxes.

        • Gamble says:

          USA tax policy creates a sticky spot.

          IF you stay below certain amount of income, all the standard deductions, credits and exemptions have great benefit. Once you get past this income point, there is like a 30K window where it is simply better to stay back where you were.

          I think many people are smart enough to take the path of least resistance. Keep your income down, keep your lifestyle minimal, maybe even opt for public transportation, and enjoy the maximum amount of disposable income for the least amount of input.

  3. chuck says:

    Jan 2010: 27.7 million employed part time
    March 2010: Affordable Care Act signed into law
    August 2014: 27.74 million employed part time

    So 40,000 more working part time and it’s all because of Obamacare.

    • Innocent says:

      Wow, are you kidding? There is a difference from the spike being caused due to the retraction in the labor market and the return to ‘normalcy’ which is I think what Dr. Murphy is eluding to here.

  4. Scott D says:

    I plotted the graph as the change in percentage of part-time employees. Look at the size of that spike in 2008-2009. It’s kind of amazing:


  5. Major.Freedom says:

    More OT:


    I think you might like this article, Murphy.

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