Posted on | March 17, 2014 | 25 Comments
Having worked as a nurse’s aide for 15 years, Ms. McCurdy has been among the nearly 25 million workers in the United States who make less than $10.10 an hour — the amount to which President Obama supports increasing the minimum wage. Of those workers, 3.5 million make the $7.25 federal minimum wage or less.
And like many of them, Ms. McCurdy hasn’t been able to rely on steady full-time hours — she has often been assigned just 20 hours a week. Even if she worked full time year-round, her $9 hourly wage would put her below the poverty threshold of $19,530 for a family of three.
If the economy were in recovery, as Democrats insist, the increasing demand for labor would offer better employment opportunities for everyone. But we all know this is not true and, absent real recovery, Democrats instead want to impede economic growth by the job-killing method of increasing the minimum wage. They propose this increase not for any economic reason, but for the political purpose of maneuvering Republicans into voting against it.
Yet an important question to be answered is, why do so many low-wage workers find themselves stuck with part-time jobs?
Most commentators viewed the February jobs report released on March 7 as good news, indicating that the labor market is on a favorable growth path. A more careful reading shows that employment actually fell — as it has in four out of the past six months and in more than one-third of the months during the past two years.
Although it is often overlooked, a key statistic for understanding the labor market is the length of the average workweek. Small changes in the average workweek imply large changes in total hours worked. The average workweek in the U.S. has fallen to 34.2 hours in February from 34.5 hours in September 2013, according to the Bureau of Labor Statistics. That decline, coupled with mediocre job creation, implies that the total hours of employment have decreased over the period. . . .
The decline in the average workweek for all employees on private nonfarm payrolls by 3/10ths of an hour — offset partially by the increase in the number of people working — means that real labor usage on net, taking into account hours worked, fell by the equivalent of 100,000 jobs since September. . . .
And why is this?
Another possibility for the declining average workweek is the Affordable Care Act. That law induces businesses with fewer than 50 full-time employees — full-time defined as 30 hours per week — to keep the number of hours low to avoid having to provide health insurance. The jury is still out on this explanation, but research by Luis Garicano, Claire LeLarge and John Van Reenen (National Bureau of Economic Research, February 2013) has shown that laws that can be evaded by keeping firms small or hours low can have significant effects on employment.
ObamaCare is killing Hope. We need a Change.