Tuesday, September 03, 2013

29 Hour Work Week Gives Higher Disposable Income than 40 Hour Work Week?

Apparently with healthcare subsidies and a lower tax bracket, working 29 hours a week instead of 40 hours a week may be more profitable.

From Ira Stoll of the New York Sun:
[Professor Casey B. Mulligan] offers the example of a person comparing a 29-hour-a-week job without employer-sponsored health insurance with a 40-hour-a-week job that includes employer-sponsored health insurance. Given the subsidies that the federal government provides for health insurance under ObamaCare, the person ends up with more money, and the same amount of health insurance, by taking the part-time job.

“Moving from-full-time employment to part-time employment can trigger generous assistance with health insurance and out-of-pocket expenses that can offset much of the income lost to reduced work hours,” he writes. “Under the ACA, it will not be extraordinary for people to be able to have more disposable income from a part-time position than from a full-time one.”

As Professor Mulligan’s paper puts it, ObamaCare’s provisions combined “raise marginal tax rates in 2015 by 10 percentage points of total compensation, on average, for about half of the nonelderly adult population and zero percentage points for the rest.” Professor Mulligan describes the results as “startling,” which may be understating it.
[emphasis added]
You can purchase and read Professor Mulligan's paper here.


MAX Redline said...

First thing I thought when reading the rosy excerpt: who pays for all that "assistance"? Sure enough:

with the bill paid by borrowing from China and future generations and by taxing mostly people working full paid work weeks.

Government takes over 1/6 of the economy, generates a nearly 20% "reduction in the reward" for working, and it's all paid for with OPM! How cool is that?

Good find, TD - this post's better than a trip to the cinema to see a horror flick. Cheaper, too....

T. D. said...

Startling that Obamacare not only is affecting healthcare but changing the parameters on "why work?".

Exactly right, Max. There's a price to pay for a nation that lives on other people's money. When working 29 hours at some jobs will get you as much (or more) as working 40 hours, it lowers the average income and lifestyle. More people will work less, and that will bring down the goods and services produced and national wealth in general. What has been done to the black community in greatly reducing their family wealth will soon be done to the whole nation.

MAX Redline said...

What has been done to the black community in greatly reducing their family wealth will soon be done to the whole nation.

Well put. That whole "Great Society" thing was certainly another of LBJ's great triumphs.

T. D. said...

Poor LBJ. A devastating legacy on Viet Nam and the War on Poverty. He left ruins everywhere except in increasing useless bureaucracy.

MAX Redline said...

Andhe irked a lot of folks when he lifted his (beagle?) by the ears....

T. D. said...

Heh! I remember that, Max.