Obamacare and Employment

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By John R. Graham,

from NCPA,

The media cheered a report published by the Urban Institute and the Robert Wood Johnson Foundation, which asserts that Obamacare (“the ACA”) does not explain the high proportion of part-time workers:

This increase in part-time work is fully attributable to an increase in involuntary part-time work. The increase in involuntary part-time work, however, is not specific to the category of part-time work defined by the ACA (i.e., less than 30 hours per week), but applies to part-time work more broadly (also between 30 and 34 hours per week). Moreover, transitions between full-time and part-time work in 2014 are in line with historic patterns. These findings suggest that the increase in part-time work in 2014 is not ACA related, but more likely due to a slower than normal recovery of full-time jobs following the Great Recession.

Perhaps we should celebrate this conclusion from Obamacare’s supporters. Previously, some cheered the theory that Obamacare, which expands Medicaid eligibility and heavily subsidizes health insurance for middle income households, would lead people to voluntarily reduce their working hours. In 2010, then Speaker Nancy Pelosi encouraged people who wanted to be musicians, for example, to quit their jobs and focus on their (as yet undiscovered) talents, because taxpayers would underwrite their health coverage.

This approach was endorsed in the Congressional Budget Office’s conclusion that Obamacare would reduce employment by 1.5 percent in 2017 and 2.0 percent in 2024 (amounting to 2 million to 2.5 million jobs). As the CBO summarized its conclusion: “Also, the ACA’s subsidies effectively boost the income of recipients, which will lead some of them to decide they can work less and still maintain or improve their standard of living.”

Four years after Obamacare passed, there is no noticeable trend in the number of musicians and artists indicating that there will be two million more of them in three years. So, it seems that the Urban Institute is right and the CBO is not: The reduction in working hours is involuntary, not voluntary. This is a testament to the American people’s work ethic, but not an endorsement of Obamacare.

The Urban Institute and Robert Wood Johnson foundation believe the terrible employment picture is “not ACA related, but more likely due to a slower than normal recovery.” What they fail to grasp is that the slower than normal recovery is caused by Obamacare.

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