The payroll numbers over the past few months seem to be pointing to a strong recovery in jobs.  However, one needs to look behind the numbers to see what really is happening.  While the numbers may look rosy, what doesn’t get said is that there is a big shift occurring in the workforce from full-time workers to part-time workers.  In the month of June alone, there were 360,000 part-time jobs added while 240,000 full-time jobs were eliminated.   So far this year, on average, 22,000 full-time jobs have been added on a monthly basis while 93,000 part-time jobs have been added on a monthly basis.  These numbers are in sharp contrast to last year’s numbers when the number of full-time jobs added on a monthly basis averaged 171,000 while the number of part-time jobs added was 31,000.  Why the shift?   One word – Obamacare.

     As we have indicated in the past, businesses and individuals will shift their investments to maximize returns.  The Affordable Health Care Act requires companies with 50 or more full-time employees – those working 30 or more hours a week – to offer insurance for those employees or face stiff fines.  Health insurance is not cheap.  The average health insurance premium for singles is over $5,600 a year and for families is over $15,700 a year.  The initial fine for companies who do not provide such insurance is $2,000 for each employee.  To combat this new law, companies have begun to hire more part-time employees and less full-time employees.  

     We are not here to offer moral judgment on whether employers should offer health care or whether Obamacare is right or wrong.  Our point is that new laws may have unintended consequences.  When laws are added, it is human nature for individuals to do things to promote their own self-interests.   That is what is happening in real-time with The Affordable Health Care Act.  These statistics demonstrating the dramatic change in employer hiring is why we believe President Obama has delayed the implementation of the employer mandate one year until 2015.  We do not believe this will significantly change employers hiring practices as the mandate remains in place and many companies already have started down the road of hiring part-time employees.    

Sincerely,

Your THOR Team