Mish's Global Economic Trend Analysis |
- Obama Slashes Four Hours Off Definition of "Full-Time" Employment; Further Explaining Surge in Part-Time Employment
- Wholesale Price Deflation Hits China's Factories
- Italy 2013 Countdown: Rescue Me
- Seamless Easing; Japan "Falling Behind" in Monetary Stimulus, Complains Economy Minister; Humorous Irony of the Day
Posted: 22 Oct 2012 11:11 PM PDT The BLS Glossary defines full-time workers as "Persons who work 35 hours or more per week". For monthly reporting, the BLS defines part-time as "those who worked 1 to 34 hours during the survey reference week". With that wording, I am not precisely sure where 34.1 or 34.5 hours fit. Interestingly, the Obamacare mandate says Anyone Who Works 30-Hour Week Is Now 'Full-Time' A little-known section in the Obamacare health reform law defines "full-time" work as averaging only 30 hours per week, a definition that will affect some employers who utilize part-time workers to trim the cost of complying with the Obamacare rule that says businesses with 50 or more workers must provide health insurance or pay a fine.Lookback Period Three Months To One Year The IRS has a publication on Determining Full-Time Status for Purposes of Shared Responsibility for Health Coverage. The key to explaining the recent jump in part-time employment is found in the look-back period. Under the look-back/stability period safe harbor method, an employer would determine each employee's full-time status by looking back at a defined period of not less than three but not more than 12 consecutive calendar months, as chosen by the employer (the measurement period), to determine whether during the measurement period the employee averaged at least 30 hours of service per week. Common sense would dictate employers look back the minimum time (three months), as opposed to a year. Thus, any employer in his right mind would reduce the hours someone worked from say 34 to something like 25 or 28, just to make sure the average hours worked was under 30. If a lot of corporations did that, and a lot people had reduced hours, then corporations would have had to hire more workers to keep the same total number of hours. Indeed there was a massive surge in part-time employment (+582,000) in October that spawned many conspiracy theories. As noted in September Jobs +114,000; Unemployment Rate 7.8%; Part-Time Workers +582,000; Initial Reaction and Election Impact, the entire .3 percentage point drop in the unemployment rate was based entirely on a surge in part-time employment. Thus, it's looking more-and-more likely that Obamacare is a healthy chunk of the explanation. Acceleration of Trend Many people emailed me that Obamacare did not start the push to part-time employment. Fair enough, but I never said it did. However, Obamacare did accelerate the trend. Moreover, it will now reduce the number of hours part-timers work. The upside is more people will be working, and there is benefit to that even if it does not reflect the true state of unemployment or the economy. Obamacare Employment Recap I have written about this issue three times recently. Here is a recap.
How to Reduce Unemployment It will be interesting to see if the BLS changes its standard from over 34 hours to 30 hours or more for full-time work. As an aside, it would be easy enough to reduce unemployment to zero. All the government need do is hire everyone in the country who does not have a job to work one hour per week at minimum wage. Voilà! We would have "full employment" in a jiffy. If that seems too radical, the administration can always try dropping the measure of full-time employment to 21 hours while pitching the resultant drop in unemployment as "Good news! Half-time is now full-time." Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com "Wine Country" Economic Conference Hosted By Mish Click on Image to Learn More |
Wholesale Price Deflation Hits China's Factories Posted: 22 Oct 2012 09:23 PM PDT Bloomberg reports China's Factories Losing Pricing Power in Earnings Threat. Chinese factories are losing pricing power in the worst wholesale-cost deflation since 2009, signaling corporate earnings may deteriorate further and putting a damper on global inflation pressures.Cure Is Time and Price The cure is time and price, not more misguided monetary stimulus or more infrastructure spending. Yet, not unexpectedly, I counted six sentences in the above article from at least four different analysts or government figures calling for more stimulus of some sort. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Italy 2013 Countdown: Rescue Me Posted: 22 Oct 2012 02:20 PM PDT There is an interesting article in El Mundo by Fabrizio Goria regarding the escalation of problems in Europe. Via Google Translate please consider a few snips from Italy 2013 Countdown. After Spain, Italy. Let us not deceive risk premiums are going down these days.Rescue Me Note: I could not get Google translate to work directly on the link. However, Google could translate blocks of text. It is going to be interesting to see how any country can be rescued when Angela Merkel placed more roadblocks on banking union. "There will not be any retroactive direct recapitalization," Merkel told a news conference. "If recapitalization is possible, it will only be possible for the future, so I think that when the banking supervisor is in place we won't have any more problems with the Spanish banks, at least I hope not."Playing politics would not cross Merkel's mind? No one can possibly believe that. Regardless, Greece and Spain are screaming "rescue me", but Spain wants a "no strings attached" rescue without austerity conditions. For now anyway, and likely up to the German election, Merkel says no dice for Spain. Moreover, 2013 is around the corner and Italy is coming right up with gross public debt issuance in the amount of 401 billion euros and 355 billion in refinancing. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Posted: 22 Oct 2012 08:39 AM PDT If you are in need of a good laugh today, please note Japan's economy minister bitterly complains "Japan is falling behind on monetary stimulus" while simultaneously pointing out the "risk of another credit-rating downgrade" as if more stimulus would make matters better. Where do they find they guys? Japan's Exports Drop 10.3 Percent In related news, Japan Exports Tumble 10%, BOJ to Conduct "Seamless" Easing. Japan's exports fell the most since the aftermath of last year's earthquake as a global slowdown, the yen's strength and a dispute with China increase the odds of a contraction in the world's third-largest economy."Seamless Easing" Inquiring minds might be wondering "What the hell is seamless easing?" (as opposed to good old-fashioned QE). It's a good question, and one I cannot answer for sure, but I very much suspect Governor Shirakawa is simply adding superfluous words to make it sound important, so as to appear as if the BOJ is not impotent (which of course it is). I can however, point out the sheer madness of global competitive currency debasement. In that regard, it's actually a good thing to be "falling behind". Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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