The Right Prescription

Labor Day Lies

Under Obama, American workers are losing ground in unprecedented ways.

By 9.4.13

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President Obama used his weekly Saturday radio address to mark the 131st anniversary of Labor Day. He swore his “highest priority” is to “reverse forces that have conspired -- for decades -- against American workers.” Yakety yak. 

Don’t believe that demagoguery. The latest Bureau of Labor Statistics data show that workers-- especially low-wage workers -- are losing ground under Obama. After four and a half years of the Obama presidency, an unprecedented number of Americans have given up looking for work, wages are stagnating, low wage earners are suffering most, and the U.S. is fast becoming a nation of part-time workers.

Payroll Tax Hike. Americans workers got clobbered on day one of 2013, when the President engineered a “fiscal cliff” agreement with Congress that, among other things, boosted the Social Security payroll tax rate -- the amount deducted from a worker’s paycheck -- from 4.2% to 6.2%. A worker earning $30,000 a year immediately felt the pinch, with $50 a week less in take home pay.

Workforce Participation. Worse, many Americans in their prime working years are no longer even looking for a job. Workforce participation -- the percentage of Americans who have a job or are seeking one -- plunged to a 34-year low of 63.3% this spring. In a May 13 report, the Federal Reserve of San Francisco called the trend “unprecedented.”

As the July employment data show, the jobs the economy is adding are low quality, low paying, and almost all part-time.

Part-Time America. From January 1 through July 31, 77% of the jobs created were part-time. Less than one out of four people hired got full time work — the opposite of a normal economy. In April, news about employers shifting to part-time hiring grew to a drumbeat.

Numerous employers cited Obamacare for the change. The new health law requires employers with fifty or more full-time employees to provide health benefits or pay a fine. Adding a $5,000 health benefit is affordable when you’re hiring lawyers but not entry-level workers. 

The mandate applies only to full-time workers, which according to the Affordable Care Act, means 30 or more hours a week. So increasingly job seekers are being offered 29 hours or less. All across the country municipal and county governments, community colleges, and state governments are doing the same as the private sector, pushing workers below 30 hours to evade the health insurance mandate

The President’s arbitrary (and unconstitutional) delay of the employer mandate from January 1, 2014 to 2015 appears to have done nothing to alleviate the trend. The reason is that the number of full-time employees an employer has now will determine whether an employer is subject to fines next year, when the mandate goes into effect.

Even a call center in Contra Costa, California, opened by the state in August to answer phone inquiries about Obamacare opted for hiring largely part-timers for less than $29 an hour and no health benefits. Hypocrisy in spades.

Workers in low wage, low margin industries have been hit hardest, as employers struggle to avoid the cost of Obamacare. An Investor’s Business Daily analysis of Bureau of Labor Statistics shows that the 30 million workers in industries where nonsupervisory employees make $14.50 an hour or less -- such as bakeries, home care providers, home centers, and general merchandise retailers -- are cutting hours to historic lows.

Americans workers are being forced to cobble together a living with two or three part-time jobs, if they can get them.

Last week, we marked the 50th anniversary of Martin Luther King’s march, which was called the March on Washington for Freedom and Jobs. Sadly, the first black president has failed to improve job opportunities for African Americans. Their unemployment rate currently is twice that of whites, up from 1.67 times the white unemployment rate in 2009.

As we see work opportunities plummet, it’s time for the Washington politicians who voted for Obamacare and brought us to this point to lose their jobs when voters go to the polls in 2014.

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About the Author
Betsy McCaugheyis a senior fellow at the London Center for Policy Analysis and author of Beating Obamacare 2014.