The Wrong Way to Aid Part-Timers

Fresh on the heels of its hard-fought victory over the union gag law, Proposition 226, labor has fired the first salvo in the 1998 legislative war. Calling for “justice for part-timers,” it supports a state Senate bill that would guarantee wage and benefit parity for part-time workers. The measure has cleared the Senate and is steps away from reaching Gov. Pete Wilson’s desk.

But the bill is a toothless tiger at best. At worst, it will exacerbate income inequality. Labor’s heart is in the right place. Part-time workers typically earn about 75 cents per hour for each dollar earned by full-time workers. Part-timers are much less likely to have health insurance and pensions. Labor’s strategy: Mandate that part-timers who do the same work as full-timers get the same hourly pay and benefits.

But the law most likely won’t have any real effect. Part-timers typically work different jobs than full-timers. Low-wage cashiers, sales clerks and day laborers frequently are part-time. Their high-wage bosses, the managers, are typically full-time. Because managers and the people they supervise do different types of work, this bill will do nothing to help the wages of the typical part-timer.

In those companies where part-timers and full-timers do the same job for different wages, companies will be able to circumvent the law by redefining jobs.

Take a grocery store. Today, Joe pays his part-time cashiers less than the full-timers. To get around the law, Joe simply shifts some responsibilities from the part-timers to the full-timers, calling the part-timers Cashier I and the full-timers Cashier II. This segregates the full-timers and part-timers into different jobs, making the bill’s impact irrelevant.

What about benefits? Joe only covers the full-timers in the store’s health plan and the Senate measure would make him extend prorated coverage to the part-time Cashier I’s, making them more expensive. To keep his labor costs down, Joe then responds by lowering the Cashier I’s wages dollar-for-dollar to make up for the added benefits. Or he fires some part-timers, replacing them with advanced price-scanning equipment, making the full-timers more productive. Either way, it’s the part-time Cashier I’s who lose out.

You can’t legislate good corporate behavior. Any company that wants to pay its part-timers less will find ways to do so. If the true goal is to provide a more generous safety net for low-wage workers, then the best way is through expanding the federal Earned Income Tax Credit, which supplements the incomes of the working poor.

The focus on mandating benefits is all wrong. The only truly effective way to cover all workers is through universal, national plans. The pending bill is the wrong way to help low-wage workers regain the ground they have lost in recent decades. Employer mandates are a convenient smoke screen for politicians who want to delude themselves that they are really looking out for the little guy.