Wednesday, April 24, 2013

Job Creation 101: Divide to Multiply

About a week and a half ago, I entered the world of retail as a Part Time employee. I am an early graduate from the University of Washington with a high GPA and a year's worth of Part Time work experience.

I am working about 24 hours a week in retail, and 16 at at the job I already held. Yes, I am working two jobs with below-average pay for a college grad and no benefits.

The real question is, why am I, as a college graduate, working two part time jobs and barely getting 40 hours a week?

The answer may surprise those who haven't paid close attention to the sections of legislation, rushed through Congress with its contents largely uncomprehended by the legislators, that are currently taking effect.

A heretofore scarcely known section of the Patient Affordable Care Act (Obama-care) has reduced the national Full Time employee status from 40 hours a week to just 30, the goal apparently being to force companies to offer insurance benefits to more of their employees, thus reducing the percent of the uninsured U.S. population. Many proponents of the healthcare reform expect the statistics to render Obama-care a success in reducing the number of "unprotected" Americans.

For a long while, I couldn't decide whether PACA advocates, particularly the legislators, are simply incompetent or uninformed in this regard, or if there is some ulterior motive for bring Full Time status down to 30 hours a week.

Now that I have been personally affected by this legislation (my supervisor referenced it directly during the interview process as the reason I cannot work "full-time"), I am convinced of the latter.

I, like most people, don't kid myself about the state of the economy: it's miserable. The Obama Monthly statistics fluctuate, sometimes showing a slight uptick in employment, but in real life, my life, I know the recession is far from over.

administration knows that, and despite over $1,000,0000,000,000 total in stimulus and "shovel-ready" projects, we haven't seen significant improvement in the jobs market.

 As my Stats instructor used to say, "Statistics don't lie, but liars use statistics"--especially politicians who need their administration to appear a success, despite all evidence to the contrary.

I didn't get a whole lot out of that class, but I have the basic math skills to understand that if a company used to have 12 employees working 40 hours a week, and suddenly it is faced with a costly increase in the provision of insurance benefits, the best way to cope with the new regulation would be to reduce 5 of your employees to PT status at 25 hours/week, and decide against hiring any more FT employees unless the nature of the job requires as many hours, such as management. You will hire another 3 employees at 25 hours to compensate for the loss of labor. Alternatively, you could cut 5 jobs (or more) to 20 hours a week and create 5 new 20 hours/week jobs.

The company deserves a pat on the back from the Obama administration. They haven't eliminated any jobs, they have created 3 by cutting the hours of 5. That's a 25% increase in employment with
the company. As a result, those workers must seek out additional labor opportunities to make up for the hours they lost, likely picking up PT positions newly created by other companies inflating their labor force in the same manner.

 National statistics will reflect this type of job creation, so the next time you hear a member of the Obama administration say the percent of employed members of the workforce has increased, think about that.

They say a recession is when your neighbor loses his job; a depression is when you lose yours. A Great Recession is when you have two.

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