Obamacare Eliminates Jobs? No, it Reduces the Workforce – and Unemployment
I came across this post from Cato’s Michael F. Cannon titled “Yes, ObamaCare Will Eliminate Some 800,000 Jobs.” Cannon quotes himself thus:
“‘The CBO projects the law will eliminate an estimated 800,000 jobs. The fashionable retort is to note that this effect ‘primarily comes from workers who choose not to work because they no longer have to work at jobs just for the health insurance.’ That defense fails for two reasons. First, a ‘job’ is when Smith and Jones exchange labor for money. It doesn’t matter whether Jones withdraws the money or Smith withdraws the labor. Either act eliminates a job. Second, it’s an odd defense of a law to say it encourages people to consume without producing.’
“Put differently: why should we care only about someone not getting a paycheck and not at all about a job left undone?” [emphasis in original]
Cannon seems to think that if Obamacare enabled 800,000 people to retire early, those jobs would remain unfilled. Really? With nearly 14 million officially unemployed and another 6 million out of the labor force who want a job?
It’s more likely that 800,000 highly experienced people leaving the labor force would cause more than 800,000 less-skilled people to be hired to replace them.
But since there are lots of variables here, let’s make it simple. Say ACA caused 800,000 people to retire early; that’s 800,000 fewer people in the labor force. And let’s say 800,000 people would be hired to replace them; that’s 800,000 moved from unemployed to employed. Based on the October jobs report out today, that would mean a reduction in the unemployment rate of half a point, from 9.0% to 8.5%.
So not only is the ACA enormously beneficial to millions of people who would otherwise not have health insurance, it’s also a jobs program. Okay, not exactly – but that’s not any worse than claiming it eliminates the jobs of people who choose to retire because they no longer need a job to have health insurance.