Zero Hedge and Denialism

If you caught the NBC Nightly News segment last week about one of the unintended consequences of the Affordable Care Act (ACA), you’ve probably guessed where I’m going with this. For those who missed it, NBC’s Lisa Myers reported speaking with “almost 20 small businesses and other entities around the country” and that “almost all said that because of the new law, they’d be cutting back hours for some employees.” Of course, NBC was merely adding to the extensive media coverage of organizations reducing workers’ hours to limit ACA costs. But the Obama administration doesn’t see why there’s such a fuss.  According to Myers:

The White House dismisses these examples as “anecdotal.” The president’s top economic advisor [CEA Chair Jason Furman] told us “he sees no systematic evidence the health care law is having an adverse impact on the number of hours employees are working.”

So, should we take our government’s word and dismiss the examples as anecdotal?

Let’s first review some of the information that’s leaked into the press:

• Starting with the public sector, municipal governments are widely reported to have considered or enacted working hour changes due to Obamacare. Here are nine that have announced changes: Long Beach (CA), Dearborn (MI), Brevard County (FL), Floyd County (IN), Cedar Falls (IA), Plano (TX), Medina (OH), Brunswick (OH) and Chesterfield County (VA).
• School districts all over the country are also limiting certain employee workweeks to under the 30 hour threshold of the ACA’s employer mandate. Published reports include: Granite (UT), Chesterfield County (VA), Wake Schools (NC), Medina (OH), Southern Lehigh (PA), Fort Wayne (IN), Papillion-La Vista (NE), Springfield Platteview (NE), Westside (NE), Douglas County West (NE), Shelbyville Central (IN), Haysville (KS), Lafayette School Corporation (IN).
• Colleges that have limited certain employees’ hours include: University of Alabama, St. Petersburg College (FL), Hillsborough Community College (FL), University of Arizona, Arizona State University, Allegheny Community College (PA), Youngstown State University (OH), Stark State College (OH), Northern Virginia Community College, Palm Beach State College (FL) and Kean University (NJ).
• Restaurant chains and franchisees cutting employee hours include: Subway, Applebee’s, Five Guys, Denny’s, Papa John’s, Olive Garden, CKE Restaurants (Carl’s Jr. and Hardee’s), Del Taco, White Castle, Wendy’s and Buffalo Wild Wings.
• While large corporations such as Regal Entertainment Group announced decisions to pare its full-time workforce due to Obamacare, others are obviously keeping their policy changes private to avoid bad publicity. Consider that Darden Restaurants took steps toward reducing employee hours last year only to back away after a flood of criticism and a dip in business. Consider also the curious case of Walmart, which quietly increased its part-time workforce at the same time it eliminated health insurance for newly hired part-timers, but somewhat implausibly denied that either change had anything to do with the health law. More recently, retailer Forever 21 denied changing its policies in response to Obamacare despite a leaked, internal memo calling for a reduction in full-time positions and a precise limit on part-timers’ working hours. Forever 21’s limit, wouldn’t you know, is 29.5 hours – exactly thirty minutes less than the threshold for the ACA’s insurance coverage requirement. Wegman’s, on the other hand, admitted that Obamacare compelled them to eliminate health benefits for those working less than 30 hours a week, but hasn’t made a public announcement about its mix of part-time and full-time employees. Other supermarkets have openly acknowledged limiting employee hours.

More broadly, NBC’s report dovetails with a Chamber of Commerce survey of small businesses finding that:

• 71% felt that Obamacare makes it “hard to hire,” and
• Half said they would either cut hours to reduce full-time employees or replace full-timers with part-timers.

Zero Hedge

Well, the big test is happening as we speak, in Southern California. I guess the idea is to blunder ahead and get ready for the exit if things go bad.