This week, Republicans launched another attack on American workers. Under the pretense of fixing Obamacare, the House passed H.R. 2575, the so-called "Save American Workers Act of 2013" by a margin of 248 - 179. 230 Republicans and 18 Democrats supported the bill. All the no votes were from Democrats. The legislation is supposed to mitigate the impact of the Affordable Care Act on jobs, but it will in fact have the opposite effect.
Raising the definition of "full time" work to 40 hours per week will simply encourage employers to cap workers' hours at less than 40 per week, and exacerbate the trend toward cutting workers' hours and benefits and sloughing corporate responsibility onto the taxpayer.
Recognizing the potential impact of H.R. 2575 requires an honest discussion of the impact of the current 30 hour per week threshold. Since the beginning of the implementation of the Affordable Care Act, employers have used the law as an excuse to cut benefits and hours.
- In December, retail giant Staples capped hours for its more than 30.000 part time workers at 25 per week, to keep them under the 30-hour "full time threshold." It was the largest of more than 400 cuts contemplated or implemented by employers, as documented by Investors.com
- In recent months, Target, Trader Joe's, Wegman's and a host of other employers have eliminated health care benefits for part time workers, essentially pushing them onto the exchanges to be subsidized by taxpayers.
- Perhaps the most disturbing trend has been the tendency of employers not only to cut and cap hours or eliminate part time workers' health benefits, but to hide behind the ACA in eliminating a host of statutory benefits that have nothing to do with the ACA or health insurers. Employers have used classification as "part-time" under the ACA standard to eliminate vacation, sick days and other basic protections, even though they are not required to do so.
Extending the definition of "full-time" work from 30 to 40 hours per week will simply increase the number of hours at which employers strip benefits from workers and therefor the number of workers whose job quality will decline in the wake of the ACA. The Congressional Budget Office has estimated that the bill would increase the number of uninsured workers in the US by 500,000 to 1 million. The UC Berkeley Labor Center estimated that 6.5 million workers would be at risk of having their hours reduced.
Let me state clearly that the core problem is not with the hours definition in the ACA -- to implement a health insurance mandate, the federal government must set some standards for definition. However, the incentives within the ACA -- particularly the large gap between the costs of providing employer-based coverage and the law's employer penalties, and the potential short term gains to employers who use the ACA as an excuse to reduce job quality -- are too powerful for many employers to resist.
The ACA is a desperately needed law -- it is morally unacceptable for a society as wealthy as ours to tolerate leaving 50 million people without health insurance. It is also a flawed law that, without smart fixes, will damage the well-being of millions of middle class Americans. Our union stands ready to work with legislators of both parties to make the fixes the law needs. Unfortunately, H.R. 2575 isn't the fix we need -- it will only make matters worse.