Report: Millions of Dollars in Fraud, Waste Found in Charter School Sector
The Washington Post - April 28, 2015, by Valerie Strauss - A new report released on Tuesday details fraud and waste...
The Washington Post - April 28, 2015, by Valerie Strauss - A new report released on Tuesday details fraud and waste totaling more than $200 million of uncovered fraud and waste of taxpayer funds in the charter school sector, but says the total is impossible to know because there is not sufficient oversight over these schools. It calls on Congress to include safeguards in legislation being considered to succeed the federal No Child Left Behind law.
The report, titled “The Tip of the Iceberg: Charter School Vulnerabilities To Waste, Fraud, And Abuse,” was released jointly by the nonprofit organizations Alliance to Reclaim Our Schools and the Center for Popular Democracy. It follows a similar report released a year ago by the same groups that detailed $136 million in fraud and waste and mismanagement in 15 of the 42 states that operate charter schools. The 2015 report cites $203 million, including the 2014 total plus $23 million in new cases, and $44 million in earlier cases not included in last year’s report.
It notes that these figures only represent fraud and waste in the charter sector uncovered so far, and that the total that federal, state and local governments “stand to lose” in 2015 is probably more than $1.4 billion. It says, “The vast majority of the fraud perpetrated by charter officials will go undetected because the federal government, the states, and local charter authorizers lack the oversight necessary to detect the fraud.”
The report makes these policy recommendations:
■ Mandate audits that are specifically designed to detect and prevent fraud, and increase the transparency and accountability of charter school operators and managers. ■ Clear planning-based public investments to ensure that any expansions of charter school investments ensure equity, transparency, and accountability. ■ Increase transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud.
It also says:
State and federal lawmakers should act now to put systems in place to prevent fraud, waste, abuse and mismanagement. While the majority of state legislative sessions are coming to an end, there is an opportunity to address the charter school fraud problem on a federal level by including strong oversight requirements in the Elementary and Secondary Education Act (ESEA), which is currently being debated in Congress. Unfortunately, some ESEA proposals do very little reduce the vulnerabilities that exist in the current law. If the Act is passed without the inclusion of the reforms outlined in this report, taxpayers stand to lose millions more dollars to charter school fraud, waste, abuse, and mismanagement.
The charter school sector has expanded significantly in the last decade and now educates about 5 percent of the students enrolled in public schools. The Obama administration has supported the spread of charter schools; President Obama’s proposed budget for fiscal year 2016 includes $375 million specifically for charters, a 48 percent increase over last year’s actual budget.
Proponents say charters offer choices for parents and competition for traditional public schools. Critics say that most charters don’t perform any better — and some of them worse — than traditional public schools, take resources away from school districts, and are part of an effort to privatize public education.
The report says that any “effective, comprehensive fraud prevention system” should include:
■ Taking proactive steps to educate all staff and board members about fraud; ■ Ensuring that one executive-level manager coordinates and oversees the fraud risk assessment and reports to the board of directors, oversight bodies, and school community; ■ Implementing reporting procedures that include conflict disclosure, whistleblower protections, and a clear investigation process; ■ Undergoing and posting a fraud risk assessment conducted by a consultant expert in applicable standards, key risk indicators, anti-fraud methodology, control activities, and detection procedures; and ■ Developing and implementing quality assurance, continuous monitoring, and, where necessary, correction action plans, with clear benchmarks and reporting
The report details cases across the country, among them:
The District of Columbia In February 2015, the DC Public Charter School Board unanimously voted to revoke the charter of the Dorothy I. Height Community Academy Public Charter School. The DC Attorney General is suing the founder, Kent Amos, for diverting public education funding to a private company for his personal profit. That private management company paid Amos more than $2.5 million over the last 2 years. Over the past 10 years, the school has paid the private entity more than $14 million and, while costs to the private company declined over that time, management fees rose. The charter board’s oversight report showed “no pattern of fiscal mismanagement.” Members of the DC Public Charter School Board have described their limited ability to oversee for-profit management companies, which face no requirement to disclose salaries or other pertinent information.
Michigan In April 2014, Steven Ingersoll, founder of Grand Traverse Academy, was convicted on federal fraud and tax evasion. He did not report $2 million of taxable income in 2009 and 2010. The school’s audit revealed a $2.3 million prepayment to Ingersoll’s school management company. The school’s later decision to write down $1.6 million of the loan put the school in a deficit position for the first time. Ingersoll then used half of a $.8 million loan for school construction to pay down some of his debt to the school.13 After the founder’s ouster, his daughter-in-law continued to handle the finances of the school.
Ohio In January 2015, the state auditor released a report of the results of unannounced visits by inspectors to 30 charter schools. In nearly half of the schools, the school-provided headcount was significantly higher than the auditors’ headcount. Schools are funded based on headcount, so these inflated figures amount to taxpayer dollars siphoned away from students. Among the seven schools with the most extreme variances between reported head count and the auditors’ headcount, almost 900 students were missing, at a cost of roughly $5.7 million.16 Auditors identified eight other schools with troubling, but less significant variances. In June 2014, a grand jury indicted the superintendent and 2 board members of Arise! Academy in Dayton of soliciting and accepting bribes in exchange for awarding a “lucrative” consulting contract to a North Carolina-based company. The contract was worth $420,919 and the charter personnel received kickbacks in the form of cash, travel, and payments to a separate business.
California In July 2014, the Los Angeles Unified School District performed a forensic audit of Magnolia Public Schools. They found that the charter-school chain used education dollars to pay for six nonemployees’ immigration costs and could not justify $3 million in expenses over four years to outsource curriculum development, professional training, and human resources services that the school itself reported doing.
Aeropostale, Disney and other retailers pledge to stop on-call shift scheduling
Aeropostale, Disney and other retailers pledge to stop on-call shift scheduling
Imagine waking up and not knowing whether you were scheduled to work. Add on to that the chaotic burden of finding a...
Imagine waking up and not knowing whether you were scheduled to work. Add on to that the chaotic burden of finding a babysitter last minute.
These six companies — Aeropostale, Carter’s, David’s Tea, Disney, PacSun and Zumiez — all required their employees to call an hour or two before a scheduled shift to find out if they would be assigned to work that day.
But no more.
A coalition that included New York Attorney General Eric Schneiderman announced today that on-call shift scheduling has come to an end for those companies.
“Today, we are seeing retailers across America take steps to curb unnecessary and unfair on-call scheduling," said Carrie Gleason, director of the Fair Workweek Initiative at the Center for Popular Democracy. "We are especially glad that employers like Disney and Carter's, whose brands promote putting families first, will stop using on-call shifts that are notorious for wreaking havoc on families' balance and puts undue stress on children."
The announcement follows an inquiry by Schneiderman and eight other attorneys general to make sure that more than 50,000 workers nationwide will no longer be subject to such a "burdensome scheduling practice." The agreements with these six companies are the latest in a series of groundbreaking national agreements secured by the New York Attorney General’s office to end on-call scheduling at a number of major retailers.
Fifteen large retailers received a joint inquiry letter in April seeking information and documents related to their use of on-call shifts. Other than the six mentioned, the list included American Eagle, Payless, Coach, Forever 21, Vans, Justice Just for Girls, BCBG Maxazria, Tilly’s, Inc. and Uniqlo. The letter stated that unpredictable work schedules "take a toll on employees."
"Without the security of a definite work schedule, workers who must be 'on call' have difficulty making reliable childcare and elder-care arrangements, encounter obstacles in pursuing an education, and in general experience higher incidences of adverse health effects, overall stress, and strain on family life than workers who enjoy the stability of knowing their schedules reasonably in advance," the letter continued.
After discussions with the Schneiderman and his fellow AGs, none of the retailers will be using on-call shifts. Also, Disney and others have agreed to provide employees with their work schedules at least one week in advance of the start of the work week as a way to plan child care and other obligations ahead of time.
“People should not have to keep the day open, arrange for child care, and give up other opportunities without being compensated for their time,” said Schneiderman. “I am pleased that these companies have stepped up to the plate and agreed to stop using this unfair method of scheduling.”
The announcement marks a continuation of Schneiderman's mission, which began last year when Abercrombie & Fitch, Gap, J.Crew, Urban Outfitters, Pier 1 Imports, and L Brands — the parent company of Bath & Body Works and Victoria’s Secret — all agreed to end the practice of assigning on-call shifts.
New York State has a “call-in-pay” regulation that provides, “An employee who by request or permission of the employer reports for work on any day shall be paid for at least four hours, or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum hourly wage.” (12 NYCRR 142-2.3).
By Anthony Noto
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Meet One of the Sexual Assault Survivors Who Confronted Jeff Flake & Triggered FBI Kavanaugh Probe
Meet One of the Sexual Assault Survivors Who Confronted Jeff Flake & Triggered FBI Kavanaugh Probe
Republican Senator Jeff Flake of Arizona was on his way to cast his vote, shortly after announcing his intentions to...
Republican Senator Jeff Flake of Arizona was on his way to cast his vote, shortly after announcing his intentions to confirm Trump’s Supreme Court nominee Brett Kavanaugh, when he was confronted in an elevator by two women who are sexual assault survivors. The women held open the elevator door, telling Flake, through their tears, that he was dismissing their pain. Soon after, Flake surprised his colleagues on the Senate Judiciary Committee by advancing Kavanaugh’s nomination but asking for an FBIinvestigation before the full Senate vote. President Trump has now ordered an FBIinvestigation into Kavanaugh. We speak with Ana María Archila, one of the women credited with helping to delay Kavanaugh’s confirmation.
Watch the video here.
Castro moves to stop VP fire from the left
Targeted by progressive activists hoping to kill his chances of being Hillary Clinton’s running mate, Julián Castro is...
Targeted by progressive activists hoping to kill his chances of being Hillary Clinton’s running mate, Julián Castro is set this week to announce changes to a hot-button Housing and Urban Development program to sell bad mortgages on its books.
The changes, which HUD officials will brief stakeholders and activists on during a conference call on Monday, could be made public as early as Tuesday — depending on when department lawyers give the green light to publishing them in the Federal Register.
But they won’t take effect before the next auction of HUD mortgages, scheduled for May 18.
Castro’s actions could potentially defuse an issue that activists have been using to question his progressive credentials — and he’ll be doing it at the moment the running mate search has begun to get serious at Clinton campaign headquarters.
Among the changes, according to people with knowledge of what’s coming: The Federal Housing Authority will put out a new plan requiring investors to offer principal reduction for all occupied loans, start a new requirement that all loan modifications be fixed for at least five years and limit any subsequent increase to 1 percent per year, and create a “walk-away prohibition” to block any purchaser of single-family mortgages from abandoning lower-value properties in the hopes of preventing neighborhood blight.
HUD officials say that the timing isn’t a response to the activist pressure or the presidential campaign calendar.
“It has always been our goal to get the policy right, regardless of arbitrary deadlines, and we expect to announce those changes this week,” said HUD press secretary Cameron French.
But the changes come after two years of calls by activists — joined last September by Sen. Elizabeth Warren (D-Mass.) — for major reforms to the Distressed Asset Stabilization Program. Their calculations — numbers that HUD says are way off — allege that during Castro’s tenure, 98 percent of problematic mortgages the department has sold went to Wall Street firms that they say were responsible for the housing crisis in the first place.
With the backdrop of a Democratic Party recalibrated by Bernie Sanders’ surprisingly strong candidacy, activists were preparing a full offensive against Castro this week, looking to leverage his political ambitions against him to extract major concessions.
Last Thursday, activists sent an ultimatum letter to HUD titled, “Seeking swift changes to HUD's DASP program,” and demanding response within 24 hours. They had set up a national day of action for Tuesday, with protests scheduled at HUD offices in New York, Philadelphia, Los Angeles and San Francisco, along with a news conference at Newark City Hall — which remains on for now, pending whether they feel HUD has gone far enough in what the agency tells stakeholders on Monday afternoon.
“I would say we’re cautiously optimistic, but we don’t know, and what we need to see is a plan that will lead to substantially more mortgages not getting into the hands of bad actors and saving more homes from foreclosure,” said Amy Schur, campaign director for the Alliance of Californians for Community Empowerment, on Sunday afternoon. “Unless we see that, it’s going to be a problem.”
Schur has been in touch with HUD regularly over the course of the past two years, and in recent weeks when the conversations stepped up after the activists fired a warning shot against Castro by launching a public effort built around the website DontSellOurHomestoWallStreet.org.
That first attack on Castro in early April prompted a number of leaders to rush to his defense — some because they felt the criticisms were unfair, others because they were eager to protect the future of arguably the most promising Latino rising star in the Democratic Party.
“Some of y’all may have seen recently concerns that were voiced about DASP,” Castro said last week in an appearance at a National Association of Realtors event teasing the changes.
“We’re improving that and have been working to do that to ensure that folks are able to stay in their homes longer because they’re offered principal reduction in certain instances,” Castro said, “that we get better outcomes for neighborhoods by making sure that folks who secure those loans aren’t able to just walk away from those properties and by instituting something that we refer to [as] ‘payment shock protection’ to make sure that once payments are modified that they don’t just jump up a couple years later.”
Other members of the coalition and signatories on the ultimatum letter are American Family Voices, the Center for Popular Democracy Action, Daily Kos, Democracy for America, MoveOn.org Civic Action, New York Communities for Change, Other 98% Action, Presente.org, RootsAction.org, the Rootstrikers Project at Demand Progress and the Working Families Party.
Schur said that she and others are hoping that HUD will include some method of incentivizing mortgage sales through early bidding or favorable rates to nonprofits and neighborhood groups, rather than the Wall Street firms that have bought many of the mortgages. They feel that large financial institutions don’t care about the effect on neighborhoods from letting properties go vacant or decline, or of overwhelming homeowners with liabilities — though many argue that the reason these institutions buy so many of the mortgages is that they are the only ones that have the capital and management capability to handle the purchases.
“Where we would like to be with HUD is partnering to roll out a positive program in our cities across the country,” Schur said. “We’d rather be doing that than protesting. But if the changes are insufficient and this program is going to continue to be almost a wholesale giveaway to speculators, we’re going to have to keep the pressure up. We’re not going to have a choice.”
HUD officials point out that the May 18 auction isn’t for the DASP program and call the complaints surrounding that unfair. It is for different mortgages, called an “aged loan sale,” scheduled before these reforms were far along. No DASP auction has been set yet for 2016, and reconsideration of the program, according to French, has been underway since the most recent DASP auction, at the end of last year.
“Since 2014, FHA has made changes to the DASP program before every sale. FHA has been working on the latest round of changes to the DASP program for months, and, in our desire to be as comprehensive as possible, we’ve engaged a broad group of stakeholders on the potential reforms that would make the most impact for distressed homeowners,” French said.
Activists had been growing frustrated with the pace and substance of the conversations with HUD, and HUD officials have been losing patience with them as well, feeling that the activists are out for attention and landing on Castro simply because his name is in the running mate mix.
And, well aware that this is a critical political moment for Castro, activists warn that they’re ready to keep after him until the Democratic convention in July, and beyond that if he is Clinton’s pick.
“We would all love for the secretary to really come through in a big way, but housing activists and folks in our neighborhoods are not going to stop when our neighborhoods are being sold off to Wall Street. There has to be a major, major change,” said Jonathan Westin, director of New York Communities for Change. “Folks are completely ready to keep pushing.”
By Edward-Isaac Dovere
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Letter to the Editor: Proposed Legislation in Maryland Would Sacrifice Standards of Charter Schools
Washington Post - March 3, 2015, by Anne Kaiser - I share The Post’s interest in a healthy environment for charter...
Washington Post - March 3, 2015, by Anne Kaiser - I share The Post’s interest in a healthy environment for charter schools in Maryland, as expressed in the Feb. 25 editorial “ Give charter schools a chance.” However, this goal cannot be achieved unless we maintain the high standards for accountability, equity and quality required by Maryland’s charter school law.Over the past decade, I have seen troubling results in states that lowered their standards. A 2014 Center for Popular Democracy report found $100 million in fraud, waste and abuse by charter schools in 14 states and the District. The National Education Policy Center found that charter school teachers face significantly lower compensation and poorer working conditions, leading to high turnover rates and the hiring of unqualified teachers. Michigan, Ohio, Delaware and Pennsylvania have seen wasted taxpayer dollars in their race to expand charter schools.Gov. Larry Hogan’s (R) legislation follows in these flawed footsteps by granting a disproportionate share of funding to charter schools at the expense of traditional public schools, permitting uncertified teachers, allowing union-busting by charter school operators and weakening safeguards for accountability. I will work hard through the legislative process to remove these harmful provisions so that we support charters without sacrificing standards.Anne Kaiser, Annapolis The writer, a Democrat, represents District 14 in the Maryland House, where she is majority leader.Source
One Word Could Be Worth a Million Jobs
Supporting a strong job market is a big part of the U.S. Federal Reserve's mandate. Fed officials, though, interpret...
Supporting a strong job market is a big part of the U.S. Federal Reserve's mandate. Fed officials, though, interpret that goal differently than most observers do. For the economy's sake, Congress should step in to resolve the discrepancy.
Specifically, the Federal Reserve Act instructs the central bank to promote "maximum employment" and "stable prices." Most people understand these instructions as meaning the Fed should seek to generate as much demand for workers as possible without causing an unduly large increase in prices.
The website of the Fed's Board of Governors, however, makes a slight modification to the jobs mandate: "maximum sustainable employment." Innocuous as it may seem, that one word can make a big difference.
How? Well, suppose inflation is running below the Fed's 2 percent target and the unemployment rate is at 5 percent, which officials consider to be its long-run level (pretty much the current situation). They can choose between two monetary policies, which are expected to result in the following paths for the unemployment rate:
Most observers would opt for the second policy. It's more aggressive, so it will get inflation back to target sooner. Even better, the unemployment rate is the same or lower every year, and by a significant amount: One percentage point is worth more than a million jobs.
The word "sustainable," however, means that the Fed views any deviation from the long-run unemployment rate -- up or down -- as undesirable. When officials speak of the economy “overheating” or “running hot” in the absence of inflationary pressures, this is what I think they have in mind. So they would see unemployment as running too low under policy 2.
Some Fed officials worry that “overheating” could trigger a recession. (I don’t understand the precise economic mechanism, but let’s leave that aside.) They think policy 2 might generate the following path for the unemployment rate:
Policy 2: Possible Recession Outcome
In 2019 and 2020, the economy falls into recession. From the Fed’s perspective, this unemployment path is terrible, because the rate is either too low or too high for the next four years.
It's easy to imagine, though, that many people would be willing to trade the risk of recessionary pain in 2019 and 2020 for the near-term gain of 2017 and 2018. They might even believe there's some chance that policy 2 will generate an outstanding outcome -- if, for example, the long-run unemployment rate is actually lower than the Fed thinks it is. Here's how that would look:
This interpretational divide was on full display last month, when Fed officials met with representatives of the pro-employment activist group Fed Up. The activists largely assumed that the central bank was contemplating near-term interest-rate increases to keep inflation in check. But most of the officials downplayed inflation, invoking instead the need to keep the economy from running too hot (which some said could lead to a recession).
I find it hard to believe that the Fed's approach is consistent with Congress's intent as expressed in the Federal Reserve Act. That said, it's really up to legislators to provide an unequivocal answer, which could matter a lot for the economy over the next few years.
By Narayana Kocherlakota
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Protesters roll loudly through Senate office buildings, 155 arrested
The chants of vocal activists echoed through the hallways of Senate office buildings Wednesday, as hundreds staged sit-...
The chants of vocal activists echoed through the hallways of Senate office buildings Wednesday, as hundreds staged sit-ins to protest the Republican health care plan that's already on shaky ground.
Clashing with the shouting was the sound of two-way radios from a larger-than-normal police presence to arrest those refusing to heed warnings to stop.
Read the full article here.
Amazon’s ripple effects: Six things that might happen if Pittsburgh gets HQ2
Amazon’s ripple effects: Six things that might happen if Pittsburgh gets HQ2
Sarah Johnson, the Local Progress Director for national advocacy group Center for Popular Democracy, said she doesn’t...
Sarah Johnson, the Local Progress Director for national advocacy group Center for Popular Democracy, said she doesn’t expect Amazon to change how it operates.
Read the full article here.
Ana María Archila: Low Wage Workers are Paving the Way to Democracy
GRITtv - February 18, 2014, by Laura Flanders - Bill de Blasio campaigned on ushering in a new era in New York City...
GRITtv - February 18, 2014, by Laura Flanders - Bill de Blasio campaigned on ushering in a new era in New York City and actively pursued low-wage voters. Now that he is Mayor, what can the people who elected him do to influence what happens next? It is a question grassroots groups grapple with around the country. On GRITtv this week, Ana María Archila shares a few ideas. Archila was a founder of one of the most effective community groups in New York; now she's heading up a regional initiative that seeks to build popular democracy, not only at the ballot box, but in between elections.
From the school to prison pipeline and stop and frisk to immigration reform and workplace safety regulations, New Yorkers are eager to seize the moment for political change, says Archila. For evidence, consider the crowds that gathered at the Talking Transition Tent which was set up in downtown, immediately following last fall's elections.
Mayor Bill de Blasio seems to be listening. Less than two months into his term he has expanded paid sick leave for hundreds of workers around the city, one of the central demands of low wage workers. But how do people ensure that this momentum continues?
"He is only listening because low wage workers are extremely organized," Co-Executive Director for the Center for Popular Democracy Ana María Archila tells GRITtv. "New Yorkers are demanding more."
In addition to paid sick leave, organizers with Make the Road New York (the community organization that Archila describes as her "organizing home") are campaigning for a raise in the minimum wage and increased work place safety regulations. Organizing locally and creating small scale initiatives, like worker or consumer co-ops, can help engage people and address some immediate needs, but ultimately, low wage Americans need to build political power.
"The biggest co-operative we have is our own government and we need to make sure that it works for us," she says.
For more on ushering in a new progressive era, watch our interview with Joo-Hyun Kang on ending the Stop and Frisk regime.
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Elevated Level of Part-Time Employment: Post-Recession Norm?
Wall Street Journal - November 12, 2014, by Nick Timiraos - Nearly 7 million Americans are stuck in part-time jobs that...
Wall Street Journal - November 12, 2014, by Nick Timiraos - Nearly 7 million Americans are stuck in part-time jobs that they don’t want.
The unemployment rate has fallen sharply over the past year, but that improvement is masking a still-bleak picture for millions of workers who say they can’t find full-time jobs.
Martina Morgan is deciding which bills to skip after her hours fell at Ikea in Renton, Wash. Sandra Sok says she’s been unable to consistently get full-time hours after she transferred to a Wal-Mart in Arizona from one in Colorado.
In Chicago, Jessica Davis is frustrated by her schedule dwindling to 23 hours a week at a McDonald’s even though her location has been hiring. “How can you not get people more hours but you hire more employees?” the 26-year-old Ms. Davis said.
The situation of these so-called involuntary part-time workers—those who would prefer to work more than 34 hours a week—has economists puzzling over whether a higher level of part-time employment might be a permanent legacy of the great recession. If so, it could force more workers to choose between underemployment or working multiple jobs to make ends meet, leading to less income growth and weaker discretionary spending.
Employers added some 3.3 million full-time workers over the past year, but the number of full-time workers in the U.S. is still around 2 million shy of the level before the recession began in 2007. Meanwhile, the ranks of workers who are part time for economic reasons has fallen by 740,000 this year to around 4.5% of the civilian workforce. That is down from a high of 5.9% in 2010 but remains well above the 2.7% average in the decade preceding the recession.
“There’s just less full-time jobs available than there used to be,” said Michelle Girard, chief economist at RBS Securities Inc.
The slow decline in part-time work is particularly acute when broken out by industries. For the retail and hospitality sectors, the number of involuntary part-time workers in October was nearly double its prerecession level. For construction, mining and manufacturing work, by contrast, the share of such part-time labor was just 9% above its pre-recession level.
Other data show that the ability of part-time service workers to find full-time work has been much slower during the current recovery. In goods-producing industries, around two-thirds of involuntary part-time workers in July 2013 had found full-time employment by July 2014, up from 60% in 2009, according to a study by the Federal Reserve Bank of Atlanta. But for service-sector workers, the rate has seen little improvement. Around 48% of involuntary part-time workers in July 2013 had found full-time work one year later, up from around 46% in 2009.
An important question for policy makers now is whether the elevated level of involuntary part-time work is due to cyclical factors, meaning it will fall as the economy heals, or to structural changes that have made employers more inclined to rely on a larger contingent workforce and avoid converting part-time workers to full-time positions.
On one side are economists like Ms. Girard, who say greater economic uncertainty and rising labor costs—from increases in the minimum wage, regulations or health-care expenses stemming from the Affordable Care Act—explain higher levels of part-time work. “There is a structural element to this at the very least,” she said.
The health-care law requires employers with 50 or more full-time equivalent workers to offer affordable insurance to employees working 30 or more hours a week or face fines. “Companies are just more inclined to hire part-time workers, not necessarily because of the health-care law, but for business reasons that make it a more attractive option,” Ms. Girard said.
Anecdotal reports have suggested employers have cut hours to prepare for the implementation of the health-care law, but that hasn’t been borne out by economic data.
An analysis by Bowen Garrett of the Urban Institute and Robert Kaestner at the University of Illinois at Chicago found a small increase in part-time work this year, but the increase occurred for part-time jobs with between 30 and 34 hours—above the 30-hour threshold that would be affected by the health-care law.
Other economists say higher levels of involuntary part-time work are mostly cyclical. Businesses don’t appear to be paying part-time workers more than full-time workers; that would be one clear sign of a shift in hiring preferences.
Elevated levels of involuntary part-time work in service jobs may reflect how low-wage employers ramped up hiring earlier in the recovery. More recently, the sector has absorbed those returning to work after long unemployment spells.
Part-time work in service jobs is “a stepping stone for the unemployed and for people out of the labor force,” said Adam Ozimek, an economist at Moody’s Analytics. Labor markets are “improving in just the way you would expect.”
Labor advocates, meanwhile, say technological changes in how businesses schedule employees are at fault. Software allows employers to schedule and cancel shifts rapidly based on business conditions.
Carrie Gleason, the director of the Fair Workweek Initiative at the Center for Popular Democracy, a labor advocacy group, said that could explain why more part-time workers say they want full-time work. “There’s now this persistent uncertainty in the jobs that hourly workers have today,” she said.
“I need to spend some time with my kids,” said Ms. Morgan, 32. “Two jobs? It’s too much.”
Ikea employees are guaranteed a minimum amount of hours every week. Those that can work “during peak times when our customers are in our stores have the opportunity to obtain more hours,” said Mona Liss, a company spokeswoman. The company in June also announced it would raise the average minimum hourly wage in its U.S. stores next year by 17%.
Meanwhile, the structural-cyclical debate has important implications for the Federal Reserve. If the changes are structural, wages might begin to rise sooner than expected, putting more pressure on the Fed to raise interest rates. If they’re cyclical, it would suggest that Fed policy can remain accommodative.
Fed Chairwoman Janet Yellen routinely highlights the elevated level of part-time work as a key measure of labor slack. “There are still ... too many who are working part-time but would prefer full-time work,” she said at a press conference in September.
Business surveys conducted by the Atlanta Fed have shown there are more part-time workers because “business conditions don’t justify converting them to full time,” said John Robertson, senior economist at the bank. But other businesses have said their reliance on a larger part-time workforce stemmed from the higher costs of hiring full-time workers.
“It would be wrong to say it’s all cyclical, and it would be wrong to say it’s all structural,” Mr. Robertson said. “We’re somewhere in the middle.”
Ulyses Coatl illustrates how any improvement might unfold. He worked for two years as a stylist at a Levi’s apparel store in lower Manhattan but quit his job in September because the hours had become too unpredictable. His schedule varied from as many as 34 hours a week to four hours, but had averaged around 18 hours in recent weeks, he said.
A Levi’s spokeswoman said the company is “always looking at ways to improve retail productivity, including store labor models and processes” that conform to “industry best practices.”
Wal-Mart says the majority of its workforce is full time, and the share of part-time workers has stayed about the same over the past decade. A spokeswoman said store employees can view all of the open shifts in their store, and that there are full-time positions available in the store at which Ms. Sok works.
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