Commentary Magazine


Topic: job losses

Do We Want to Free Americans from Work?

The response from the White House and liberal outlets to yesterday’s Congressional Budget Office report that predicted a loss of a staggering 2.3 million full-time jobs as a result of the implementation of ObamaCare was every bit as astonishing as the report itself. Rather than facing up to the sobering news and acknowledging that the job loss was a disastrous, if unintended consequence of the misnamed Affordable Care Act, liberals cheered. Or at least pretended to cheer.

We were told the loss of all these jobs is good because it means Americans who maintained full-time employment in order to keep their health insurance no longer need be “tied” to their jobs. ObamaCare now gives them the “freedom” to work less, pursue their dreams, or just kick back and enjoy life without the drudgery involved in productive employment thanks to the president’s signature health-care legislation. Viewed this way, it’s not job loss but a glorious liberation from the burdens of “job lock.”

A White House economic adviser put it this way: 

It reflects the fact that workers have a new set of options and are making the best choices that they can choose to make for themselves given those options.

More articulate, if no less problematic, was this explanation from the New York Times editorial page:

The new law will free people, young and old, to pursue careers or retirement without having to worry about health coverage. Workers can seek positions they are most qualified for and will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families. It is hard to view this as any kind of disaster.

This transparent partisan spin is unconvincing, not only because it is rooted in a reality that has less to do with the plight of most working people than of elites who look forward to prosperous retirements once their company goes public. The true disaster here is the reality of another massive government program that not only burdens employers and makes them less inclined to offer benefits but has also created a widespread disincentive for people to work. The CBO numbers illustrate once again that ObamaCare is primarily a redistributionist program that helps a small group of people but penalizes an equal or greater number while placing an intolerable burden on the economy.

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The response from the White House and liberal outlets to yesterday’s Congressional Budget Office report that predicted a loss of a staggering 2.3 million full-time jobs as a result of the implementation of ObamaCare was every bit as astonishing as the report itself. Rather than facing up to the sobering news and acknowledging that the job loss was a disastrous, if unintended consequence of the misnamed Affordable Care Act, liberals cheered. Or at least pretended to cheer.

We were told the loss of all these jobs is good because it means Americans who maintained full-time employment in order to keep their health insurance no longer need be “tied” to their jobs. ObamaCare now gives them the “freedom” to work less, pursue their dreams, or just kick back and enjoy life without the drudgery involved in productive employment thanks to the president’s signature health-care legislation. Viewed this way, it’s not job loss but a glorious liberation from the burdens of “job lock.”

A White House economic adviser put it this way: 

It reflects the fact that workers have a new set of options and are making the best choices that they can choose to make for themselves given those options.

More articulate, if no less problematic, was this explanation from the New York Times editorial page:

The new law will free people, young and old, to pursue careers or retirement without having to worry about health coverage. Workers can seek positions they are most qualified for and will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families. It is hard to view this as any kind of disaster.

This transparent partisan spin is unconvincing, not only because it is rooted in a reality that has less to do with the plight of most working people than of elites who look forward to prosperous retirements once their company goes public. The true disaster here is the reality of another massive government program that not only burdens employers and makes them less inclined to offer benefits but has also created a widespread disincentive for people to work. The CBO numbers illustrate once again that ObamaCare is primarily a redistributionist program that helps a small group of people but penalizes an equal or greater number while placing an intolerable burden on the economy.

As our John Podhoretz said in a column published today in the New York Post, the impact of ObamaCare on work choices is no different from any other “government handout” in that it can give people a good reason not to work since doing so would actually result in a loss of income rather than a net gain. But since this financial assistance is underwritten by higher taxes as well as increased health-care costs for those not receiving the subsidy, the result also discourages productive economic activity at the other end of the spectrum.

One of the president’s evergreen themes is that the goal of his health-care legislation and his entire economic program is to help hard-working Americans. But, as the CBO demonstrates, ObamaCare’s impact on the economy reveals is that it will punish those who work and encourages some to stop. This will, as Ross Douthat argues elsewhere in today’s Times, hurt far more than it helps:

Given the current economic landscape, especially — in which persistently high unemployment coexists with a growing population of workers too discouraged to even look for work — the size and scope of a work-discouraging effect matters a great deal: The bigger the effect, the more likely that the people dropping out aren’t just, say, parents cutting hours to spend more time at home while the other spouse works full time, but people we should want to be attached to the workforce, for their own long term good and the good of the economy as well.

While liberals are lauding an economic disincentive to work, for weeks they have also been arguing that precisely this outcome is inapplicable when discussing legislation to indefinitely extend unemployment benefits indefinitely. When conservatives pointed to economic studies that proved that creating a system under which benefits were transformed from a temporary measure to a permanent subsidy would mean that the long-term unemployed would be less likely to search for work, liberals dismissed this as a slander against the unemployed. But economic facts are not as pliable as liberal talking points would have them. One cannot simultaneously explain ObamaCare job losses as a beneficial result of a disincentive to work while simultaneously insisting that there is no such effect when discussing the unemployed.

As the CBO made clear, we are just now starting to comprehend how disastrous the unintended consequences of ObamaCare will be. The job loss numbers paint a picture of a country where work will be discouraged and productivity penalized. A proper understanding of the long-term problems this will create for the nation goes beyond the political impact of ObamaCare. Americans don’t need to be freed from work. A government that sees this as a beneficial development is one that has not merely lost touch with the basic middle class values it claims to champion but is also one that feels no compunction at putting the nation on a path to certain economic ruin.

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CBO Political Dynamite: OCare Job Losses

Judging by his State of the Union address and the confidence with which Democrats have tried to focus the national political conversation on income inequality, it was obvious that the administration had concluded that ObamaCare was no longer a political problem. But today’s report from the Congressional Budget Office predicting that the health-care law would result in the loss of more than two million full-time jobs shows just how unfounded that conclusion has turned out to be. The report, which provides the most detailed analysis of the impact of ObamaCare on the economy, said the law would reduce hours worked by Americans across the board.

As the New York Times reports:

The budget office analysis found that much of the law’s effect comes from reducing the need for people to take a full-time job just to get insurance coverage, and from the premium subsidies effectively bolstering household income.

But it will also have an effect on businesses, the report said, including by encouraging them to reduce employee hours to avoid the so-called “employer mandate.”

The report also chipped away at the administration’s main argument for retaining the controversial law: the vast expansion of benefits for the poor and those unable to obtain insurance because of pre-existing conditions:

The budget office also estimated that about a million fewer Americans than expected will receive health insurance coverage in 2014 through the marketplaces established by the Affordable Care Act, primarily because of the troubled rollout of the exchanges. It also revised its estimates of the number of people receiving coverage through Medicaid and Children’s Health Insurance Plan coverage, lowering it by about 1 million.

While the White House is attempting to spin the numbers to prove that the job losses are meaningless, the political impact of this report is clear: ObamaCare will remain a major, if not the single most important, political issue in the 2014 midterm elections. Moreover, since the CBO says most of the damage won’t be fully felt until after 2016, the idea that the health-care law will be widely accepted once implemented is also a pipe dream of the Democrats who passed it without a single Republican vote. That means Democrats, including Hillary Clinton, dreaming of the White House must understand that they will also be faced with the absolute necessity of defending the law in the next presidential election cycle.

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Judging by his State of the Union address and the confidence with which Democrats have tried to focus the national political conversation on income inequality, it was obvious that the administration had concluded that ObamaCare was no longer a political problem. But today’s report from the Congressional Budget Office predicting that the health-care law would result in the loss of more than two million full-time jobs shows just how unfounded that conclusion has turned out to be. The report, which provides the most detailed analysis of the impact of ObamaCare on the economy, said the law would reduce hours worked by Americans across the board.

As the New York Times reports:

The budget office analysis found that much of the law’s effect comes from reducing the need for people to take a full-time job just to get insurance coverage, and from the premium subsidies effectively bolstering household income.

But it will also have an effect on businesses, the report said, including by encouraging them to reduce employee hours to avoid the so-called “employer mandate.”

The report also chipped away at the administration’s main argument for retaining the controversial law: the vast expansion of benefits for the poor and those unable to obtain insurance because of pre-existing conditions:

The budget office also estimated that about a million fewer Americans than expected will receive health insurance coverage in 2014 through the marketplaces established by the Affordable Care Act, primarily because of the troubled rollout of the exchanges. It also revised its estimates of the number of people receiving coverage through Medicaid and Children’s Health Insurance Plan coverage, lowering it by about 1 million.

While the White House is attempting to spin the numbers to prove that the job losses are meaningless, the political impact of this report is clear: ObamaCare will remain a major, if not the single most important, political issue in the 2014 midterm elections. Moreover, since the CBO says most of the damage won’t be fully felt until after 2016, the idea that the health-care law will be widely accepted once implemented is also a pipe dream of the Democrats who passed it without a single Republican vote. That means Democrats, including Hillary Clinton, dreaming of the White House must understand that they will also be faced with the absolute necessity of defending the law in the next presidential election cycle.

The CBO report isn’t all bad news for Democrats as it predicts lowered deficits in the years to come. But try as they might, the job loss numbers are a body blow to the president’s party heading into a midterm election cycle in which the odds were already stacked against them. With ObamaCare enrollment numbers significantly below where they must be for the system to pay for itself and state exchanges burdened by “glitches” that also imperil the law’s success, the outlook for the misnamed Affordable Care Act is grim.

Since the law’s passage in 2010 critics feared the employer mandate would result in massive cuts in full-time employees as small companies reduced workers to part-time status in order to avoid the costs and the regulatory headaches of complying with the statute. It has also led to the decisions of major companies such as Target, Trader Joe’s, and Home Depot to reduce insurance coverage for part-time employees pushing them into the exchanges to purchase ObamaCare.

All this adds up to a situation in which the number of ObamaCare losers is starting to outnumber the total number of Americans who benefit from the law. The assumption all along by both hopeful Democrats and worried Republicans was that once it was in place the law’s distribution of benefits would make it impossible to significantly amend or repeal it. But with each passing month as the disastrous rollout of the law continues, and more details of its catastrophic effects on the economy become apparent, it becomes clearer by the day that the problems it is creating for millions of Americans who have seen their existing plans canceled and replaced with more expensive coverage or are faced with the loss of full-time employment cannot be ignored.

Democrats who plan to face the voters in November by trying to change the subject to discussions of the minimum wage or vague talk about inequality must think again. Ignoring the devastating impact of ObamaCare on an economy that is still not fully recovered from 2008 is not a winning strategy. Faced with voters who know from their own experience they are paying a heavy price in jobs, increased health-care costs, and poorer coverage, Democrats are going to have to do better than to tell the people that ObamaCare is off-limits for discussion or debate.

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