Obamacare in the Workplace: Fewer Hours, Lower Incomes and Less Health Insurance
February 16, 2016
News Article
Obamacare is having a large effect on the market for low-wage labor. How do l know that? I did something most economists never do. I asked. I’m not alone. A lot of enterprising reporters have asked as well.
For example, April Dembosky in The New York Times quotes employees as saying that most fast food restaurants in central valley Californian have reduced almost all workers (other than the managers) to fewer than 30 hour per week. The reason: to avoid the Obamacare mandate to provide expensive health insurance to full time employees.
Michael Cannon of the Cato Institute has produced a table showing that there are similar reports in newspapers in every state in the union.
Economists call this kind of evidence “anecdotal,” and often insist that it is a poor substitute for numerical data showing statistical significance. But there is a problem with aggregate national statistics. We’re coming out of a recession. That means all kinds of good things are happening in the labor market—most of them unpredictable—at the same time one bad thing (Obamacare) is happening. As Joe Antos and James Capretta explain in a recent Health Affairs post, with all that noise it’s hard to separate the good from the bad in statistical tests.
