by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
“When I saw the strikes on TV earlier this summer in New York and Chicago, I said to my co-workers, ‘We need to bring this to Durham,’” said Willieta Dukes, a 39-year-old Burger King employee.
A $15 hourly wage, almost double the $8.56/hour average for North Carolina fast-food workers, would equal about $31,000 a year for full-time employees. It’s more than double the federal minimum wage, which many fast food workers make, of $7.25 an hour, or $15,000 a year.
Dukes has been at the Durham Burger King for about a year. She hoped to be full time but recently saw her hours cut to about 27 a week.
“I enjoy my work. I enjoy serving people,” she said. “Why should I have to do something else when they cut back on our hours? They tell us we’re good. Why can’t they pay us what we are worth?“
Here’s why: Obamacare. It has created perverse incentives for employers across the nation to add only part-time jobs. As reported in July, part-time jobs are at an all-time high, while full-time jobs are declining. Halfway through this year, only 130,000 full-time jobs have been added, dwarfed by 557,000 additional part-time jobs — nearly six part-time jobs for every full-time job.
This is not news. Forbes warned in May that
employers are already reacting to ObamaCare. In fact, there was a huge shift to part-time employment in the fast-food industry beginning in January. The reason: ObamaCare will employ a 12-month “look back.” That is, in deciding whether a worker is full-time or part-time next January (when the mandate becomes effective) the government will look at the average weekly hours worked in the previous year.
One fast-food restaurant owner I talked with (owning 100 franchises) told me that the average workweek for their employees has been reduced to 25 hours this year–compared with 38 last year.
Money Morning said in July that “America has become a part-time nation,” and explained that
Obamacare has likely played a significant role in the part-time job wave. Under the Affordable Care Act, companies with 50 or more full-time workers must provide health insurance to all full-time employees, those working 30 or more hours per week.
So if your workers don’t work 30 hours per week you don’t have to provide health insurance. It makes economic sense to have a part-time work force in many cases. Even with the administration’s recent one-year extension of implementing the employer mandate until 2015, most small companies are still preparing to it.
A reported 74% of small businesses are positioning themselves to slash hours, layoff workers or both.
The Wall Street Journal wrote in February about “job sharing” in reaction to Obamacare:
It’s already happening across the country at fast-food restaurants, as employers try to avoid being punished by the Affordable Care Act. In some cases we’ve heard about, a local McDonalds has hired employees to operate the cash register or flip burgers for 20 hours a week and then the workers head to the nearby Burger King or Wendy’s to log another 20 hours. Other employees take the opposite shifts. …
Many franchisees of Burger King, McDonalds, Red Lobster, KFC, Dunkin’ Donuts and Taco Bell have started to cut back on full-time employment, though many are terrified to talk on the record. Activist groups have organized boycotts against Darden Restaurants, which owns Olive Garden and Red Lobster, for daring to publicly criticize ObamaCare. It’s safer to quietly dodge the new costs and avoid becoming a political target.
Other restaurants have also announced being forced to go the part-time route, including Papa John’s, White Castle, Subway and many others across the United States. And it’s not just fast-food restaurants, of course; it’s businesses everywhere.
No doubt many of the striking workers deliberately chose this future by voting to ratify the previous four years’ of economic malfeasance and block any chance of beating back Obamacare, but that doesn’t make the havoc it will wreak any easier to swallow.
And as WRAL reports around the cause, they likely won’t know what’s really responsible, but will instead blame the people employing them for being mean by cutting back on their hours despite telling them they’re good employees.