The Law of 50 and 30 in Under Employment
Talk of unemployment rates and the bad economy was all conversation and news was about just a few years ago. Now that the unemployment rate is back to a suitable number, the chatter has subsided and things are back to normal. Well, they’re actually super not back to normal. A less noticed section of workers is on the rise; the under-employed. These are workers who do have jobs, but their positions are either short-term gigs, or don’t offer enough hours of work.
We heard about the over 1 million hires last year, and it put minds across America to rest, but when we found out that nearly 75 percent of those jobs were part-time, it brings up some issues.
There are several reasons for this spike in part-time work, but the leading reason for small and mid-sized companies seems to be the law of 50 and 30 as those numbers relate to the impending Affordable Healthcare Act. This act that has been repeatedly pushed back will require employers with 50 or more full-time workers to provide healthcare coverage or be penalized. Full-time work is defined as 30 or more hours. So, there are two ways that companies are getting around providing healthcare under the new act: 1) Cutting down their employee count to fewer than 50 and 2) Cutting back hours to fewer than 30.
Both of these small business money saving hacks are contributing to the under employment issue that we’re facing. While mid- to small-sized companies don’t seem like they would account for many jobs in the big scheme of things, they are a large source of new job positions. When part-time work isn’t enough to get the job done, instead of making workers full-time, they simply hire more part-time work. As this becomes the norm, we start to see a big problem in our nation’s economic growth and labor rights.
This law of 50 and 30 may sound low-handed or unfair, but there are always two sides. Although the AHA has been pushed back, companies still need to prepare for the time that mandates will actually be enforced. These push backs and uncertainty have left employers with no real estimates for budgetary planning. If they can’t be sure of the costs, how can they plan for them? It makes sense for them to play it safe by aligning their workforce with the loopholes. This is really the only way that these smaller companies can ensure that they survive the changes. So while it might seem like workers are getting the short end of the stick, these businesses haven’t really been left with very many options.
For a lot of these companies who are still offering full-time employment to most of their workers, it could be a very rude awakening when the AHA does go into effect. Obviously other factors like a struggling economy and the new trend of lean operations that we adopted during the recession, feed into the issue of under employment. Senior economist Heidi Shierholz said,
The difference between 30 and 40 hours can be the difference between being able to make ends meet month-to-month. That contributes to reduced living standards for American families and translates into having less income to spend on goods and services, which holds back the economy.
Under employment sounds far less scary than unemployment, so communities haven’t really put up much of a fight. As the trend of under employment increases however, it will most likely become more apparent as a real problem.