Has Obamacare Already Affected the Service Industry?

Have our worst fears about Obamacare been realized? According to the Wall Street Journal, last month, leisure-and-hospitality businesses hired more workers than any other industry...but the majority of them were part-time.

The WSJ reports that in June, the hospitality sector accounted for 75,000 of the 195,000 jobs added, but that employers increased staff by hiring part-time workers in view of reducing costs before the Affordable Care Act takes effect.

"Since passage of the ACA, we've increased the number of our part-time employees, although we haven't fired people to do so," said a chief executive of White Castle Management Co., which owns over 400 burger restaurants.

Obamacare, or the Affordable Care Act, requires employers with 50 (or more) full-time workers to offer them affordable health insurance starting in 2015, or face fines. This has prompted various critics to point out that businesses will do anything to avoid paying, including reducing staff and hours.

"Companies don't want to pay for health care unnecessarily if they can avoid it, so they'll try to avoid it," said a senior U.S. economist at Capital Economics.

According to the Washington Post , the number of U.S. citizens looking for full time employment but with only part-time jobs has gone up by 322,000—in fact, the number of part-time workers is at 8.3 million now, an all-time high.

The owner of several Del Taco restaurants, who currently has 180 full-time and 40 part-time workers, is now switching to 80 full-time and 320 part-time workers, just to reduce health-care costs, the WSJ reports. He reckons he would have to pay $400,000 a year if he didn't make the switch.

Last month, Reuters reported that Walmart was only hiring part-time employees at nearly half of its stores.

But the White House maintains that Obamacare will help employers in the long run.

"The health-care law will decrease costs, strengthen small businesses and make it easier for employers to provide coverage to their workers," said a spokeswoman for the Department of Health and Human Services.

Since the measure of the act has been delayed until 2015, there's still a small possibility that the mandate can be improved and refined before it goes into practice. We hope.