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Health Care Law Projected to Cut the Labor Force
- tking8924 13y agoI think its important to note their correction: "An earlier version of a headline accompanying this article on the home page was incorrect. The health law is projected to result in a voluntary reduction in the work force equal to 2.5 million full-time workers, according to the Congressional Budget Office, not two million fewer jobs."
- coldcode 13y agoSeems like a rather glaring error to make. It's a huge difference between retirees and the unemployed.
- 300bps 13y agoI think it would also be a glaring error to assume these are retirees. What evidence do you have that they are retirees and not 30 year olds that are purposely holding back productivity because of the incentive the government is now giving to not work?
- jeremymcanally 13y agoUh, what? The government isn't really giving an incentive at all. If I were young and didn't have a lifestyle that required a full-time salary, I certainly wouldn't be shackled to a full-time job just to keep insurance. I think that's the case for a ton of people. You also have to consider the small business case. I can't tell you how many technology workers I know who have health issues and would otherwise be building a startup or working as a consultant, but before the ACA they could never dream of getting or keeping health insurance. I mean I'm a relatively healthy 20-something and was denied health insurance several times, and when I was approved, was paying ridiculous amounts per month because I was 10 pounds overweight. Putting those prices back in line for most people and not tying health insurance to a full-time job is the whole point. I fail to see how this is government offering an incentive of any sort, unless that's what you meant and it was poorly phrased?
- yummyfajitas 13y agoIf I were young and didn't have a lifestyle that required a full-time salary, I certainly wouldn't be shackled to a full-time job just to keep insurance. I think that's the case for a ton of people. So you are saying you might produce less as a result of subsidies given to you if you choose not to have a full time job? You are agreeing with 300bps.
- jeremymcanally 13y agoWhat I'm saying is if, for example, my spouse and I could work enough to pay our bills without working full-time jobs I absolutely would. And that would not require taking advantage of a government subsidy. If I worked 10 hours a week as a consultant at $120/hour, that's over $60k, well out of the realm of any real "subsidy" from the government for insurance. So, no, I do not agree with him.
- yummyfajitas 13y agoRequiring insurance companies to charge you and a person at a healthy weight the same price is a subsidy (and applies at all income levels). You agree with his claims, just not his tone.
- 300bps 13y agoThe government isn't really giving an incentive at all This statement is incredibly naive and shows a complete lack of knowledge of economics. When the government gives incentives for making less money, then they are giving an incentive to make less money. It's that simple, but let me explain. To get a bronze family plan on healthcare.gov, I was quoted $12,000 per year with a $12,700 deductible. Basically, I'd be paying $24,000 per year for healthcare. That's the list price, which is what I have to pay if my wife and I make more than $96,000 per year (1/4 of the income goes toward healthcare). The cost goes down the less I make below $96,000. This is government giving me an incentive to make less money.
- byoung2 13y ago
- brohoolio 13y agoThis is expected. There is a whole class of people who are working just for insurance because it was prohibitively expensive on the open market for individuals. If you make it affordable for them to purchase healthcare as individuals they'll retire. Hopefully it means that people who want to work will be able to back fill those jobs. I think it's a good thing for the economy. It can't be a good thing to force individuals to work when they'd have the means to retire if they were able to purchase healthcare at the same rates as large companies.
- hga 13y agoNit: large companies purchase healthcare itself, and have specialist companies administer it, including I'm sure arranging the usual negotiated rates. They're big enough to do their own pooling. Individuals have to buy insurance, because only a combination of them can form a (large enough) pool. And I note that your analysis that this is good only holds in a situation like today, where there's a labor surplus. In the future it could be a very bad thing, especially if individuals in otherwise productive parts of their life don't work and therefore don't pay for the Baby Boomers' retirement promises like Social Security and Medicare. ADDED: one thing we can be very sure about this law: there's going to be a bunch of "UNINTENDED consequences", and some of them will be bad. Some are likely to be very bad; one thing recently remarked on is that VCs are pulling back sharply from funding biomedical ventures, right now due to uncertainty, but things like the medical device tax are a component of that, and of well documented existing company retrenchment.
- fbags 13y agoOne other thing we can be very sure about this law: there's going to be a bunch of "unintended consequences", and some of them will be good. Some are likely to be very good.
- CWuestefeld 13y agoCan you name other government programs -- particularly any of this scope and complexity -- that have had unintended positive consequences?
- rtpg 13y agoThis title will be read by people and a lot will interpret it as 'less jobs'. But the exact opposite will happen: Some people will work less, so more people will need to be hired. Plus wages will have to go up to account for the shortage. In a way, the ACA is creating jobs. Or at the very least, it'll increase wages. That's a selling point. EDIT: I thought I wrote the "increasing jobs" in a "wouldn't it be funny if this were true" sort of sense, guess I didn't. As for the wage increase, Business insider seems to think so at least (http://www.businessinsider.com/the-buried-lede-in-the-cbo-report-obamacare-will-raise-wages-2014-2 http://www.businessinsider.com/the-buried-lede-in-the-cbo-re...).
- Fuxy 13y agoI thought that was the case. They phrased it so badly i actually quit reading it in the middle because it was giving me a headache. Loss of working hours for businesses does not mean loss of jobs it means finally people can work decent hours and employers can't take advantage of them as easily.
- angrybits 13y agoNot everyone is salary. Hourly people tend to want all of the hours they can get, since it results in more income.
- Already__Taken 13y agoHourly people want more income not more hours, People don't want 12 hour shifts and they shouldn't have to do it to earn a living wage. A company needs to pay what that costs or their not worth being a company.
- CWuestefeld 13y agoA company needs to pay what that costs This is unclear to me. The company needs to pay what what costs? As far as I can see, they are indeed paying hourly workers for the hours that are worked, so this can't be what you're referring to. What is the cost that they're not paying?
- heydenberk 13y agoPeople who would otherwise spend time with their families, friends, hobbies and side projects will no longer be forced to work more hours at their jobs. Others who don't have full-time jobs will have an easier time getting them. Some good news for once.
- angrybits 13y agoThese are houly people that need the hours to make ends meet. They are being forced into part time so that they aren't eligible. This is definitely a net negative, but not the least bit surprising.
- heydenberk 13y agoYou may not have read the article of the CBO report.
- throwwit 13y agoPart time jobs have already been leveraged by companies to reduce obligations. I'm not sure if there's much left to squeeze out at this point.
- hga 13y agoWith a deadline of the end of this year, I suspect we've only seen a fraction of what'll happen when the employer mandate goes into effect. Especially since a bunch of regulations for big companies, the ones that self-insure, haven't been finished yet, so it's probably up in the air if such maneuvers will help (i.e. would D.C. pass up such an opportunity to squeeze more cash out of them?)
- joshuaheard 13y agoThe economy is a measurement of the productivity of the workers. By cutting 2 million man/hours, or whatever metric they use, you are cutting the economic productivity that much. So, it will hurt the economy no matter how you spin it. Further, it is not like they are getting health care due to an efficiency in the system. The government is taking resources from the productive (taxes) and giving it to the unproductive (subsidies) in order to purchase insurance. This will further erode economic productivity.
- byoung2 13y agoI wonder if they have estimates on how many of those hours will move to the shadow economy as workers just work more hours for cash under the table.
- CWuestefeld 13y agoFew or none. The economic effect that the study is showing is not an increase in unemployment. What they're expecting is that fewer people will be motivated to work (or to work a second job, perhaps). Imagine someone self-employed who also works part time to get medical insurance benefits; with PPACA he wouldn't need to do this any longer. On the other hand, imagine someone who was working just to supplement the spouse's income. With PPACA's subsidies, the extra income (within certain ranges) becomes a liability, and it makes more sense for that person to stay home without the earned income, enjoying the healthcare subsidy instead. So this doesn't say anything about unemployment (as it's commonly defined).
- byoung2 13y agoWhat they're expecting is that fewer people will be motivated to work (or to work a second job, perhaps) They should also expect that some people will appear to reduce their hours or quit that second job, when in fact they trade it for some off the books work. For example, the musician who used to work part time at Applebees might just teach guitar lessons for cash in his spare time instead. The person supplementing the spouse's income is not going to just stay home and watch TV...they might run an unlicensed daycare or become a basement hairstylist or freelance web designer for cash.
- michaelochurch 13y agoCorrection: February 4, 2014 An earlier version of a headline accompanying this article on the home page was incorrect. The health law is projected to result in a voluntary reduction in the work force equal to 2.5 million full-time workers, according to the Congressional Budget Office, not two million fewer jobs. If true, this is a good thing. We, as a society, don't need "jobs" or hours worked. We need stuff made. Voluntary attrition of the least productive 5-billion person-hours per year won't hurt us much, but that will cause wages to rise (which will, over time, improve what is produced). We're already producing a lot of stuff. What we need now is a qualitative focus, serious consideration of sustainability and, above all, better leadership. Taking some pressure off the lower and middle classes (i.e. peeling back the wage serfdom that gives power to feudal strongmen) is a start. There used to be a Fordist connection between general prosperity and the well-being of businesses, rippling up to the very rich. But the consumer credit boom killed that (sort of). Instead of letting wages rise or prices fall, the poors could be pumped full of loans they couldn't afford to repay. We saw, in 2008, how well that works out, but the fundamental structure of society hasn't changed. Obama has made many tactical mistakes with the PPACA, and I wish he had started at single-payer to make public-option the compromise, but if "Obamacare" is bringing us back toward a more cooperative, progressive society, then that's a good thing.
- rwissmann 13y agoThe whole discussion is baffling. The US health care system consumes almost 20% of GDP. That is twice as much as any other developed country - without seeing better health care results. Making changes to a system that corresponds to one fifth of the annual economic output will obviously have massive consequences. However, it is hard to see how you could possible make the economics of US health care worse. ACA gives more people the ability to individually choose their health care insurance, thus increasing competition and hopefully giving the health care buy side more incentive to drive down prices.
- jboggan 13y agoChoosing not to have a certain level of health insurance or any health insurance at all is also a choice. Or rather, it was.
- maxerickson 13y agoOne simple way to make health care more expensive with minimal improvements to outcomes would be to devote even more resources to extraordinary measures. The U.S. healthcare system is not set up to maximize outcomes. I guess I agree that is a problem, but it makes efficiency comparisons less interesting.