Jobs and a Policy

There are conflicting reports concerning the impact of Obamacare on job creation.  The President’s Council of Economic Advisors says, for instance, that since Obamacare’s enactment in 2010, 9 out of every 10 jobs created have been full time jobs—that is, by the Obamacare definition, jobs that required 30 or more hours of work each week.  Other economists disagree and talk about stunted job creation due to Obamacare.

Who’s right?  The answer depends on more than whom you ask; it hinges on the time period covered by the answer.  CEA is right when the time frame runs from the end of March, 2010, when Obamacare formally became law.

Andrew Puzder, Chief Executive Officer of CKE Restaurants, essayed a different answer, based on a different time frame, in a recent Wall Street Journal op-ed.  He suggested that (paraphrasing here), instead of spring 2010 to now, the relevant time frame is January to July 2013.  Why those six months?  For most of the preceding three years, the content of Obamacare was ill-understood, with clarity only trickling out over the time.  Businesses aren’t going to make major changes, including in employment, when they know they have only a poor understanding of the future.  They’re going to stick with their status quo, including the types of jobs for which they hire.

Two bits of clarity that did emerge over those three years were the definition of “full-time employment” (that 30 hours per week bit) and the full-time employment baseline to be used in determining a business’ insurance requirements under Obamacare—what the look back period would be.  The look back period turned out to extend as far back as 12 months prior to the date the employer mandate was to take effect.

With an effective date of 1 Jan 14, that starts our period of interest at 1 Jan 13.  On 2 July, President Barack Obama decided he wouldn’t do his Constitutional duty of law enforcement as it applied to the employer mandate: he announced he would not enforce that mandate for a year.  1 July 13 thus marks the end of the two quarters of employment data that exist prior to Obama’s decision diluting the mandate’s effects on hiring.

What was the effect of the employer mandate on hiring during the time employers thought the look back period was operational?

Between Jan 1 and June 30, according to the Bureau of Labor Statistics, the economy added 833,000 part-time jobs and lost 97,000 full-time jobs, for net creation of 736,000 jobs.  In reality, the economy overall added no full-time jobs.  Rather, it lost them.


In July and August [the two months following the announced delay in enforcement and so after the look back period], the economy lost 20,000 part-time jobs and added 132,000 full-time jobs.

That’s pretty unequivocal.

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