Sunday, March 10, 2013
Lower Unemployment..or "Job Splitting?"
Obama and company are doing a joyful jig in the White House this morning. The jobs report came out and said we had created 244,000 jobs in the latest reporting period and the jobless rate had fallen to 7.7 percent. That sounds great on the surface doesn't it?
But I've been reporting on the ever expanding trend of "job splitting" during the last few months and I tend to think the news this morning was more frightful than good. Here's why.
The labor participation rate was the lowest since 1981 at 58 percent. That signals an even greater number of workers who have given up looking for work. Historically, a healthy economy will generate a labor participation rate in the high 60's.
For those of you who read me regularly, you will recall my reports on Denny's and Olive Garden and all of the other Darden chains of restaurants who have converted their full time workers to "part time" status beginning in January. Employers did this to get around Obamacare taxes and penalties. Any employee who works less than 30 hours is exempt from Obamacare mandates and tens of thousands of employers have opted to either drop Obamacare mandates and pay the fines, reduce employees, or convert employees to part time status.
Just last week we learned that more and more employers are embracing the ideas of "job splitting". You hire two workers, each of them working 20 hours each and avoid having to offer full time benefits and you avoid the heavy burden of Obamacare mandates.
Then, this morning, one of those Wall Street gurus came on CNBC and told Rick Santelli that he is suspicious about all these folks finding jobs. Andy Brenner of National Alliance Securities told Santelli that he thinks the employment situation may well have gotten worse, not better. While this job splitting gets employees around Obamacare mandates it certainly hurts the employee. Not only do they lose healthcare coverage but they lose benefits that normally go to full time workers. And they certainly can't support a family on twenty hours per week!
So, the question that now must be answered: Did we really create good, solid full time jobs? Or did America just begin the new and terrible trend of making millions of American workers "part timers", unable to provide a solid floor of support for themselves and their families? If that's the case it would certainly appear that more jobs were created when, in actuality, all we did was to break up one good paying job and created "two" part time jobs.
While Obama and company may be dancing joyfully this morning I suspect there are an awful lot of Americans working 20 hours per week and looking hard for that next 20 they so badly need to feed their family.