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POLICY INSIGHT
BEYOND THE NUMBERS

“Save American Workers Act” Would Put More Workers at Risk

The House Ways and Means Committee plans to mark up tomorrow the “Save American Workers Act,” a bill to raise the threshold for full-time work under health reform from 30 to 40 hours a week.  As we have previously explained, however, this move would exacerbate the very problem that the bill’s sponsors hope to solve — that health reform may lead to more part-time work. Health reform requires employers with at least 50 full-time-equivalent workers to offer health coverage to full-time employees or pay a penalty.  Critics claim the requirement is prompting employers to shift some employees to part-time work.  As the Wall Street Journal reports, however, recent data provide scant evidence of such a shift. The fact is that it’s too early to know how health reform will ultimately affect the amount of part-time work.  But there’s every reason to expect the impact to be small as a share of total employment. We do know, however, that raising the threshold for full-time work from 30 to 40 hours a week would make a shift toward part-time employment much more likely — not less so.  Ken Jacobs, chair of the University of California’s Center for Labor Research, says, “While we can expect some employers to cut workers’ hours as a result of the current law, the number would explode if the [proposal to increase the threshold] was adopted.”  New York University’s Sherry Glied and Claudia Solis-Roman find that “increasing the threshold would not only subject a much larger proportion of workers to having their hours cut, but would also increase the federal costs of health reform.” Only about 8 percent of employees work 30 to 34 hours a week (at or modestly above health reform’s 30-hour threshold), but 43 percent of employees work 40 hours a week and would be vulnerable if the threshold rose to 40 hours (see chart).  Another few percent of employees work 41 to 44 hours a week.  Thus, more than five times as many workers would be at risk of having their hours reduced if the standard for full-time work went from 30 to 40 hours.
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