(Bloomberg Business) — There is probably a little less slack in the labor market than meets the eye.
The Patient Protection and Affordable Care Act (PPACA) has raised the number of people working part-time involuntarily — i.e. those that would prefer to have a full-time job — by anywhere from 320,000 to 580,000, according to research by JPMorgan Chase & Co.’s Chief U.S. Economist Michael Feroli. Starting this year, the law required employers with 100 or more workers on payrolls to offer health insurance for most employees working at least 30 hours a week. Beginning in 2016, those with 50 or more employees will also need to comply.
Here’s why that means one of Federal Reserve Chair Janet Yellen’s favorite labor-market metrics is showing numbers that are probably weaker than the true underlying trend.
Yellen pointed to these so-called part-timers for economic reasons during her press conference last week as one reason why central bankers will take their time in raising the benchmark interest rate.
“Involuntary part-time employment remains elevated,” Yellen said. “Although progress clearly has been achieved, room for further improvement remains.”