Obamacare’s Widening Gyre Of Inaccessibility For Low-Wage Workers

September 3, 2013 by Ben Bullard


Few publications have voiced as much unfettered hatred for Obamacare asInvestor’s Business Daily. While many conservative news sources have drawn direct connections between the Affordable Care Act’s insurance mandates and their potential effects on the healthcare coverage marketplace, IBD has consistently gone a step further, sussing out some of the more subtle ways Obamacare could harm the broader economy.

The latest such report came last Friday, when IBD explained how the low-wage service industry is likely to continue an already-begun trend of paring back employee hours (an effort to dodge the ACA’s 30-hour insurance threshold) until the number of low-wage earners working part time makes the recession-era service economy, in hindsight, look like a veritable job fair.
IBD’s Jed Graham breaks down the Obamacare-scare phenomenon this way:

The White House and like-minded economists have disputed the notion that ObamaCare is having a meaningful impact on work hours by noting that the private-sector workweek has recovered pretty much back to where it was in 2007, before the economy tanked.

But that view from 40,000 feet overlooks what is happening in industries likely to feel the brunt of ObamaCare’s employment impact: those in which wages are modest and the ranks of the uninsured are high.

A more rigorous analysis of monthly industry data from the Bureau of Labor Statistics reveals a stark contrast between workers in low-wage industries and the rest of the private sector.
For the 30 million workers in industries where nonsupervisors average about $14.50 an hour or less, the workweek has been shrinking pretty steadily for the past 18 months, reversing a fledgling recovery in work hours.

As of June, these workers averaged 27.7 hours per week — only four minutes more than the record low hit in March 2009.

And preliminary data point to a further decline in the low-wage workweek in July, possibly to new depths. Sectorwide July data show the workweek shrank in both the leisure and hospitality and retail industries, among others. Those two industries alone account for nearly 75% of these 30 million low-wage jobs.

Things are still tough all over, right? Maybe so, but the trend that’s emerging in the low-wage, uninsured employment sector is particularly dire when compared with those who’ve been working longer hours in better-paying jobs. The workweek for those who’ve held jobs of more than 30 hours per week has remained relatively stable, with the number of hours and minutes worked in a typical week actually rising, slightly, above the pre-recession level.

But for the low-wage demographic, there exists an ever-widening feedback loop in which slashed worker hours leads to fewer people who can afford to opt in to insurance exchange coverage.

That, in turn, shrinks the pool of paying participants in the State-run Obamacare health insurance exchanges, which means that the cost of each policy will necessarily have to rise.

“The trajectory of the low-wage workweek should be a concern, considering that many employers delayed hard decisions amid confusing regulations that were late in coming,” IBDstates.

“Further, employer penalties will keep pace with health insurance premiums, which reliably grow far faster than hourly wages for modest-skill workers. That means the employer mandate’s bite may become more painful over time.”

At some point, especially after subsidies have maxed out in 2015 (or 2016 or beyond, at the rate the delays keep coming), can individual customers — or the employers still trying to offer coverage plans to their full-time workers — afford it?

Filed Under: Conservative Politics, Liberty News, Staff Reports