Tonawanda News

February 12, 2014

DUVALL: Obamacare killing 2 million jobs? Spare me

By Eric DuVall
The Tonawanda News

Tonawanda News — It was certainly an eye-catching and — seemingly — vindicating headline for conservative critics of President Obama’s health reform.

The nonpartisan Congressional Budget Office said last week in a report on the Obamacare rollout it was likely the law would cost 2 million jobs over the next several years.

Wow! This really is a job-killing train wreck we should repeal immediately.

If only that were actually what the report said.

The CBO, long the official score-keeper in Washington policy battles, said work hours equivalent to 2 million full-time jobs will be lost for a variety of reasons, but the most common being workers voluntarily reducing hours because they no longer are forced to work full time to maintain health insurance benefits.

In other words, hundreds of thousands of Americans will be confident enough in health care reform available on government exchanges they’ll finally cut the cord at the office.

There’s a huge difference between getting handed a pink slip and someone voluntarily stepping away from a job to spend more time with family and doing whatever people do when they aren’t at work.

I think they call it retirement, actually. We usually celebrate it with some cake in the conference room on someone’s last day. Maybe a beer at the office’s preferred Friday happy hour spot.

Another much smaller group that doesn’t need a paycheck as much as cheap health care will intentionally keep their hours low in order to make less money and take advantage of government subsidies on the Obamacare exchanges. 

Of course, little of that was said on Fox News. The CBO gave the GOP plenty of fodder and media outlets — particularly right-leaning ones — took the narrative and ran without offering anything close to the proper context.

And another underreported fact: When 2 million work hours are lost it creates a shortage in the labor market. Businesses will certainly have to fill some of them, offering opportunities for younger workers to get a foot in the door. And any Economics 101 student can tell you when supply (in this case available workers) goes down, costs increase. 

When there are fewer workers, wages go up for those still in the labor market.

Yes, workers who prefer to stay home will, in the aggregate, create an environment where companies are forced to pay workers more to keep them from looking for other work — or for some more time on the couch. 

If we’re striving for full context, supporters of the law, myself included, should confess not all of what the CBO said was good news for the economy as a result of health reform taking effect.

Not all the people who will see their hours reduced will want it to happen. Some companies have made it known they plan to reduce large portions of their workforce to part-time status to avoid having to offer expensive health insurance benefits. It’s an unintended consequence of the individual mandate — and a major flaw in Obamacare. Congress owes it to the American people to correct that problem, probably by reducing the weekly hours-worked quotient considered full time to somewhere around 30, thereby forcing businesses to make a basic decision: Do you really want to pay that many more workers to do the jobs you need them to do, or is it just easier from a logistical standpoint to let employees who want to work a full week do so and pay them accordingly, including health insurance?

It’s a relatively simple fix. That is, if the GOP was willing to work with Democrats to improve Obamacare rather than insisting on nothing short of total repeal.

It’s an election year. Don’t hold your breath.

Eric DuVall is the managing editor of the Tonawanda News. Contact him at eric.duvall@tonawanda-news.com or follow him on Twitter, @EricRDuVall.