Says "new mandates are already reducing full-time employment."
Heading into the 2014 elections, Republicans have targeted several U.S. Senate seats in their bid to flip partisan control of the chamber. One of these targeted incumbents is three-term Democratic Sen. Mary Landrieu of Louisiana. A full year before the election, one conservative group -- Americans for Prosperity, founded by billionaire libertarian brothers David and Charles Koch -- has already begun to air a 30-second spot critical of Landrieu. The ad ties Landrieu to President Barack Obama’s health care law. As ominous music plays in the background, a narrator highlights Landrieu’s past support of the law and an on-screen headline flashes on the screen: "New mandates are already reducing full-time employment." "Louisianans told Mary Landrieu to vote ‘no’ on Obamacare. Instead she sided with Barack Obama," the narrator says. "Now we’re paying the price." The mandate in question is a provision in the Affordable Care Act that requires companies that employ 50 or more full-time workers -- those that work 30 hours a week -- to provide health insurance or else face a penalty. This provision of the law has led some to speculate that large companies will cut back on hours, or on employees, to avoid incurring the added costs. But is there evidence that "new mandates are already reducing full-time employment," as the ad says? We took a look. Economy looms large The headline used in the ad came from an editorial in the Wall Street Journal, which has been critical of Obama’s health care law. The unsigned editorial, published in February, is largely based on anecdotal evidence from companies, mostly in the fast food sector, that have said they plan to reduce employee hours in the wake of the mandates. However, independent analysis suggests that the recession and the slow recovery are a bigger culprit than Obamacare, at least so far. As we noted when we checked a recent claim by CNBC’s Maria Bartiromo, a report from the Federal Reserve Bank of San Francisco puts the current situation into context. The recession drove up the fraction of part-time workers from about 17 percent in 2007 to a peak of 19.7 percent in 2010. It has declined since then. As of the latest data, it stands at 19 percent. The study’s bottom line is that recessions drive up the fraction of the workforce who are in part-time jobs when they would rather be working full-time. The 1983 recession pushed the share of part-timers to 20.3 percent. That’s significantly higher than the peak for the most recent recession. What’s different this time though is that the part-time employment rate has remained higher for many more months than in past recessions. The authors put the cause squarely at the feet of the overall economy. "The U.S. labor market has recovered only about three-fourths of the jobs lost during the recession and its aftermath, which leaves finding a full-time job still challenging for many workers," they said. "General labor market slack remains the key factor keeping part-time employment high." The report considers whether the Affordable Care Act could be shaping employers' hiring decisions, but concludes that other factors -- including long-standing IRS rules -- suggest the ACA has not made a significant change. "Before the law was passed, most large employers already faced IRS rules that prevented them from denying available health benefits to full-time workers. These rules gave employers an incentive to create part-time jobs to avoid rising health benefit costs." Indeed, a Wall Street Journal article published by the paper’s news side, titled "Don’t Blame Health Law for High Part-Time Unemployment," concurs with this analysis. When we contacted Americans For Prosperity, the group pointed us to an article in Investor’s Business Daily that catalogs all the companies that are curbing hours to less than 30 a week as a result of Obamacare. But the data is less convincing than it appears. Most of those employers, many of them in the public sector, are cutting back the hours of workers who already aren’t considered full-time -- a development that wouldn’t provide full support for the contention that "new mandates are already reducing full-time employment." Of the 350 employers listed, about 200 said they will be limiting the hours of their part-time work force, and dozens others were cutting hourly workers or positions for student teachers, adjunct professors, or similar jobs that would not have been counted as full-time workers anyway. Our ruling In its ad, Americans for Prosperity said that new mandates from Obamacare "are already reducing full-time employment." It’s a plausible scenario, but as of now, it’s largely speculative, with the evidence anecdotal rather than statistical. Across the economy as a whole, part-time employment is high, but independent observers say that has to do with the recession and the weak recovery rather than Obama’s health care law. We rate the Americans For Prosperity claim Mostly False.
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