Is Involuntary Part-time Employment Different after the Great Recession?

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Letter Writer:

 Jason Marshall of Louisville, Ky., a portfolio manager for mortgage-backed securities

Date Posted:

 Aug. 25, 2014


 First, this is an informative article, and I will share it as I think it is important for people to understand this trend and how it might prospectively impact monetary policy. While it is likely difficult to quantify, I think Obamacare, and its namesake's penchant for creating uncertainty by frequently amending it with executive order, is directly impacting the decision of companies to add part-time workers instead of committing to full-time employees. Without being able to project the cost of benefits related to full-time employment, employers would rather add more part-time employees or invest in capital upgrades. So long as the 30 hour per week threshold is maintained in the law, the higher proportion of PTER (part time for economic reasons) workers will become a structural issue and investment will shift more toward technology and efficiency upgrades. Additionally, I think this is directly responsible for near zero real wage growth.

In closing, when laws make full-time human capital more expensive, businesses' demand for it will decrease. Additionally, the uncertainty created by frequent amendment to the law by executive order exacerbates the problem and makes it much more difficult for businesses to forecast labor cost with any confidence. This is bad policy that should be fixed.

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