Lots of Words and Few Facts From Ted Cruz
Exactly what Ted Cruz accomplished with his 21-hour stemwinder from the Senate floor yesterday and today is unclear. What’s not debatable is his central argument against President Barack Obama’s health-care-reform law -- that it is “the single biggest job-killer in America.” It’s flat wrong.
Cruz not only claims that joblessness is growing because of that most fearsome of boogeymen, Obamacare. The Texas Republican, whose speech was designed to delay a government-spending bill that would defund Obamacare, also says the Affordable Care Act is forcing people with full-time jobs into part-time work.
The facts say otherwise. It’s simply too early to tell what impact the law will have -- especially because its mandate for employers to offer coverage hasn’t taken effect.
For the sake of argument, though, let’s accept that the health-care-reform law is motivating employers to behave the way Cruz says. In January 2015, it will require employers with at least 50 full-time workers to offer health coverage or pay a penalty. In theory, the law gives employers whose workforces hover near the 50-person cutoff an incentive to stay below it. And because employers above the cutoff only have to cover full-timers, they have good reason to convert as many people to part-time as possible.
It’s true that many of the new jobs employers have created this year have been part-time. There is also anecdotal evidence that some small businesses are switching full-timers to part-time work, and that some large employers are telling workers they will no longer provide coverage at all.
The problem is that what’s possible theoretically -- and visible anecdotally -- isn’t showing up in the data.
U.S. Labor Department numbers show that the share of part-time employees in the workforce shot up during the recession, as one would expect. Since a 20 percent peak in 2010, however, the part-time rate has declined to 18.8 percent today.
What’s more, that rate may be due more to changes in the structure of the workforce, according to a recent study from the Federal Reserve Bank of San Francisco. A growing financial dependence on parents, higher college enrollment, lack of skills for certain jobs and weak labor-force attachment have made young adults more likely to have part-time jobs.
It’s important to note that most people who work part-time -- 18.9 million workers -- choose to, not because a weak economy or job-killing legislation forced them into it. The number working part-time for economic reasons -- they would prefer full-time jobs but couldn’t find one -- is 7.8 million, or 5.5 percent of all employees, down from a peak of 7.1 percent in September 2010.
Still, there was a slight jump in part-time jobs in June and July. One culprit could be sequestration: Because of across-the-board budget cuts, which Cruz favors, almost 200,000 federal employees worked shorter hours in July. If Cruz and his Republican colleagues succeed in shutting down the government entirely, the number of furloughed workers could jump to 800,000. A default would have far worse consequences.
Senator Cruz is right about one thing: Employers are uneasy about hiring. Their anxiety stems from a halting economic recovery made even more unpredictable by frequent threats of government shutdowns and debt defaults. That’s the dubious strategy he and his fellow Republicans should be examining.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at firstname.lastname@example.org.