One in Four New Jobs in Bars, Restaurants

On Friday, the Labor Department reported that the economy gained just 162k jobs in July, well below expectations of 185-200k. More worrying, though, isn’t just the quantity of jobs created, but the quality of the jobs. About a quarter of the jobs created, 38.5k, were in restaurants and bars. Another 46.5k jobs were in retail. This continuing trend to part-time employment is likely due to the coming implementation of ObamaCare.

The spike in jobs in both restaurants and retail isn’t due to increased demand. Over the past two years, Americans have reported cutting back and dining out less. In June, retails sales actually fell 0.1%, after excluding autos and gas. Overall personal consumption has been generally flat this year and certainly doesn’t seem to warrant a hiring spike.

What’s likely happening is these industries are hiring more workers so that, overall, each employee is below the 30-hour a week threshold that triggers ObamaCare’s mandates. The average number of hours worked across the entire economy ticked down in July to 34.4 hours, just above the mandate. That’s across all jobs, so hours in the retail and restaurant industries are likely much lower. 

Retail and restaurants are most vulnerable to the ObamaCare mandate. Companies in these industries generally do not offer health insurance. Where they do, their plans are much less generous than what will be required under ObamaCare. Restaurants have slim, single-digit profit margins and their customers are particularly sensitive to price increases. 

A consumer can’t choose not to buy gas, but they can choose to eat at home. 

Restaurants and retail companies, however, have business models that allow them to adapt rather easily to the ObamaCare mandate. They can adjust work shifts so that no employee works more than 30 hours a week. With hiring largely stalled in the rest of the economy, there is a ready pool of labor to fill these jobs. 

One positive is that their are now more than enough bartenders to allow the rest of us to drown our economic sorrows.