In a study conducted by the Mercatus Center at George Mason University, Casey Mulligan, an economics professor at the University of Chicago, found that ObamaCare will push Americans to part-time work. The study, entitled, “The Affordable Care Act and the New Economics of Part-Time Work,” finds that ObamaCare’s taxes reduce employment overall, amounting to about 4 million fewer full-time workers.
The key findings of the study are:
- “The ACA’s employment taxes create strong incentives to work less. The health subsidies’ structure will put millions in a position in which working part time (29 hours or fewer, as defined by the ACA) will yield more disposable income than working their normal full-time schedule.
- The reduction in weekly employment due to these ACA disincentives is estimated to be about 3 percent, or about 4 million fewer full-time-equivalent workers. This is the aggregate result of the law’s employment disincentives, and is nearly double the impact most recently estimated by the Congressional Budget Office.
- Nearly half of American workers will be affected by at least one of the ACA’s employment taxes—and this does not account for the indirect effect on others as the labor market adjusts.
- The ACA will push more women than men into part-time work. Because a greater percentage of women work just above 30 hours per week, it is women who will be more likely to drop to part-time work as defined by the ACA.”
The study says, ObamaCare “creates disincentives to work that act as taxes on employment.” These “disincentives” are:
- “The ACA imposes a $2,000 penalty for each full-time employee imposed on large employers (generally those with 50 or more workers) that do not offer health insurance. Due to this penalty’s unfavorable tax treatment, it is effectively a $3,000 employment tax and can be expected to reduce full-time employment.
- The ACA denies health insurance subsidies to full-time workers and their families unless their employer fails to offer “affordable” coverage. Because these workers would qualify for insurance subsidies by cutting their weekly work hours to part time, this provision creates an implicit tax that reduces the benefit of working full time.
- The ACA phases out health insurance subsidies as workers’ income increase. This compounds the escalated federal and state tax liabilities workers already face for earning more income.”
Other findings from the study are:
- “For 20 percent of the labor force—some 33 million workers—their families’ eligibility for exchange subsidies hinges entirely on their employment status. In any month they work part time or not at all, they can obtain subsidized coverage; in any month they work full time, they do not qualify for these subsidies. Members of this group would, on average, have to work an additional 5.5 hours per week to make up for the subsidies they forgo by working full time.
- “Because of the penalty on employers who do not offer health insurance, 5 percent of the workforce faces a new implicit income tax. These workers, who are left to obtain coverage from the ACA exchanges, would have to work at least four hours a week for free if they were to compensate their employer for the $2,000-per-employee penalty the ACA imposes.
- “An additional 21 percent who work for employers not offering coverage will find that their employers are less willing or able to pay their workers because of the ACA’s employer penalty. These workers, on average, would have to work four hours a week for free if they were to compensate their employers for the non-coverage penalty.
- “Those who would otherwise work just above 30 hours per week will be induced to cut their weekly work hours to part-time. This effect will be especially pronounced for those working 30–35 hours per week; for them, dropping to 29 hours a week is a relatively small adjustment.
- “Those who continue to work full-time despite the taxes will tend to reduce the number of weeks they work per year (because in those periods they can obtain subsidized coverage) by more than they will increase their weekly work hours. In other words, some of those who continue to work full time will work for fewer weeks per year, and be unemployed for more weeks, than they otherwise would.
- “Income taxes reduce weekly hours worked and weekly employment rates.
- “Women (regardless of marital status) are especially likely to reduce their hours to below 30 per week because they represent a greater percentage of those currently working 30 to 35 hours, and thus can drop to 29 hours with comparatively little cost.”