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Analysis: Little evidence yet that Obamacare costing full-time jobs

People sign up for health insurance information at a Covered California event which marks the opening of the state's Affordable Healthcare A
People sign up for health insurance information at a Covered California event which marks the opening of the state's Affordable Healthcare A

By Jason Lange

WASHINGTON (Reuters) - There is little evidence that employers are sacrificing full-time jobs by hiring more part-timers or reducing existing employee hours because of the costs of providing health coverage under Obamacare.

Conservative Republicans have pointed to the high level of part-time employment as evidence businesses are cutting hours for staff in response to the new healthcare law, which will require them to offer health insurance to full-time workers.

And one in five businesses in the service sector think President Barack Obama's signature healthcare reform has hurt employment at their firms over the last three months, a National Association of Business Economics survey showed on Monday.

But there is little discernible impact in the employment figures released in recent months, including the September numbers out on Tuesday. The number of people with part-time jobs who want full-time work, for example, was essentially flat in September at 7.9 million.

"We are not seeing any effect in the data," Jason Furman, chairman of the White House Council of Economic Advisers, told Reuters Insider.

Part of the reason may be the White House's decision to delay the beginning of Obamacare's so-called "employer mandate" until January 2015. Under the mandate, which was previously due to take effect in January 2014, firms with more than 50 employees must provide reasonable healthcare insurance to employees who work more than 30 hours a week.

Also, the number of part-time workers spiked in 2008, well before Obamacare was enacted, and has been slowly falling as a share of total employment since 2010. In September people working part time because they could not find full-time work made up 5.5 percent of the employed, unchanged from August. The spike in 2008 and the steady drift downward since then suggests the elevated level of part-time workers is more likely due to the economy's weakness.

The issue is a sensitive one for the administration, which is also on the defensive over a clunky rollout of a website workers use to navigate the new health insurance landscape created by Obamacare.

Many businesses polled by the NABE said they were holding back on hiring due to the costs imposed by the law. The survey also showed 15 percent of service sector firms planned to shift to more part-time workers due to Obamacare. But that may not be translating into hiring decisions.

"Health reform's employer mandate is likely to have some effect on hours worked, but it hasn't yet shown up in the data," Paul Van de Water, an analyst at the Center on Budget and Policy Priorities, wrote in a report this month.

Ron Axelrad, chief executive of Access Staffing, which places part- and full-time employees across the greater New York City area, said his firm had been getting a lot of calls from companies six months ago about how to prepare for Obamacare.

But the delay of the employer mandate has pushed the issue "out of everyone's mind," he said.

"Probably toward the second or third quarter of next year, companies will be very aware again that they have to prepare," Axelrad added.

(Additional reporting by Alister Bull in Washington and Steven C. Johnson in New York; Editing by David Brunnstrom and Xavier Briand)

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