Posted on 02/07/2014 5:48:51 PM PST by Praxeologue
The U.S. has been in a jobs emergency since at least 2008. The cause of the crisis -- too little demand -- isn’t mysterious, and neither are the solutions. We could invest in infrastructure to create construction jobs. We could give tax breaks to employers who hire new workers. We could restore the payroll tax cut to workers so they have more money to spend. We could help state and local governments hire back some of the employees they laid off during the recession. Macroeconomic Advisers, an economic consulting firm, found that the American Jobs Act, which contained many of these policies, would have created 2 million jobs.
But in recent years, these policies have been either blocked or canceled by congressional Republicans. They fought Democrats to scuttle the American Jobs Act and allow the payroll tax break and long-term unemployment benefits to expire. Creating jobs, they argued, was neither feasible nor affordable.
That’s the proper context in which to view this week’s hysteria about Obamacare. The nonpartisan Congressional Budget Office just released updated estimates for the health law. It found that the disastrous rollout last fall put Obamacare behind schedule -- on track to insure 2 million fewer people than projected by the end of 2014. On the other hand, it also found that insurance premiums were about 15 percent lower than projected, and that the law would cost less than previously estimated. It found that the risk corridors designed to safeguard insurance companies from the effects of acquiring too many high-risk customers -- which Republicans have been calling an “insurer bailout” -- will actually yield $8 billion in net payments from insurers to the federal government.
The finding that made the news, however, concerned the Affordable Care Act’s long-term effect on labor supply. In past reports, the CBO has estimated that the law will, on net, lead some people to drop out of the labor market or cut back on their hours because their health insurance is no longer tied to their job. Imagine a 62-year-old who would like to shift to part-time work but can’t because he can’t afford -- or, due to pre-existing conditions, wouldn’t even be sold -- insurance on the individual market. Now, because Obamacare has made that insurance affordable and available, he can -- and will. As a result, his work hours will be (voluntarily) reduced.
Previously, the CBO had estimated this would reduce total hours worked by about 0.5 percent. Now, it estimates the effect at 1.5 percent to 2 percent of hours worked -- a reduction in hours equivalent to more than 2 million full-time jobs.
The CBO was very clear about what this means: “The estimated reduction stems almost entirely from a net decline in the amount of labor workers choose to supply, rather than from a net drop in business’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment.”
The CBO’s clarity didn’t forestall a festival of motivated misreadings. The conservative Washington Times, for instance, featured this headline: “Obamacare will push 2 million workers out of labor market.” That has the distinction of being not only untrue but also the very opposite of the truth. Workers are choosing to cut back hours -- not being pushed to do so.
Whether this is good or bad depends on your views about human flourishing. Lower labor-force participation is bad for economic growth. On the other hand, the point of life is not for everyone to work every possible hour until they die. Workers should be able to choose to leave their jobs or cut their hours without worrying that their families won’t survive a medical emergency. In addition, as the Urban Institute’s Donald Marron tweeted, “employers will be competing harder for workers,” which will push wages to rise for everyone remaining in the workforce.
In context, the freakout over the CBO estimate is perverse. Is it really the Republican position that we should do nothing - - in fact, cut aid -- for the millions of long-term unemployed, but express shock and terror that employed people will, in a few years, cut back their hours or leave the labor force by choice? Shouldn’t we be more concerned about people desperate to join the workforce, who can’t, than about people voluntarily leaving the workforce, who can?
Some Republicans will say, of course, that they don’t oppose helping the jobless. They just oppose increasing the deficit or increasing taxes to do so. But repealing Obamacare raises the deficit, too! So rather than increasing the deficit to help people who want jobs get them, we would be increasing the deficit to make sure people who want to leave their jobs can’t. That’s insane.
Policies don’t exist in vacuums. By untying the link between employment and health care, the Affordable Care Act reduces the incentive to work. But there are ways to increase incentives to work without making people dependent on their jobs for health insurance. We can help people without taking away their health care.
So here’s a simple proposal. Repeal of the Affordable Care Act would cost hundreds of billions of dollars over the next few decades because of the law’s spending cuts and new revenue. So instead of repeal, how about if Congress devotes that same amount of money to policies to increase employment now. Republicans could even dictate that all the money flow to targeted tax cuts.
If they are worried about employment rather than scoring points against Obamacare, this should be an easy compromise to strike. Anyone think it will be?
the best part
now while i am walking down the side of the road kicking horse turds
there are TWICE as many to kick
This little communist twerp has been wrong about every economic data point over the past 5 years.
We could do what FDR did to boost employment.
START A WAR.
Millions of young men with no skills sent somewhere to fight. Millions of others building tanks, bullets, etc. only to have to keep building more as the ones they just build get destroyed.
It would be a workers paradise. Nearly zero unemployment.
Klein says that the economy stinks because the government didn't intervene ENOUGH.
Zero unemployment? That’s not what Klein wants. He says that “the point of life is not for everyone to work every possible hour until they die.”
And China has 18 million unmarriageable men it needs to find something useful to do. I don’t want to be around to see the next war. It will be a very bloody affair.
Ezra is a fool...
Did he miss cash for clunkers
2009 stimulus aka American Recovery and Reinvestment Act of 2009
$831 BILLION— a historic package of tax cuts, safety-net spending, infrastructure projects and green-energy investments
“Shovel-ready” jobs
The Act specified that 37% of the package is to be devoted to tax incentives, 18%, is allocated to state and local fiscal relief (more than 90% of the state aid is going to Medicaid and education). The remaining 45% is allocated to federal spending programs such as transportation, communication, waste water and sewer infrastructure improvements; energy efficiency upgrades in private and federal buildings; extension of federal unemployment benefits; and scientific research programs.
A May 21, 2009, article in The Washington Post stated, “To build support for the stimulus package, President Obama vowed unprecedented transparency, a big part of which, he said, would be allowing taxpayers to track money to the street level on Recovery.gov...
But three months after the bill was signed, Recovery.gov offers little beyond news releases, general breakdowns of spending, and acronym-laden spreadsheets and timelines.”
Recovery.gov website was redesigned at a cost estimated to be $9.5 million through January 2010.
“He says that “the point of life is not for everyone to work every possible hour until they die.””
Well, there’s no point in EVERYONE having to do it....!
And they say America is going downhill. Hah. Soon, we will have TWO leisure classes!
As just one example, consider the infamous “Cash for Clunkers” program, the $3 billion federal plan that allowed people to trade in an old car in exchange for about $4,000 off the purchase of a new one. The administration argued it would stimulate the U.S. economy and improve the environment. Critics saw it as a way for the government to prop up the car companies it had recently bailed out. But whatever the motivation, the program was a bust. Economists at the think tank Resources for the Future have found in a new study that the program did not stimulate the economy, and that 45 percent of the money went to people who would have bought a new car anyway. In other words, the administration could have cut out the overhead and simply handed out $1.35 billion to random people on the street.
The ineffectiveness of this program is illustrated by rigorous economic analysis. But Americans know in their hearts that they could drop the needle almost anywhere on Obama’s Big Government Spending Album and get the same basic results: lots of spending with little to show for it.
http://www.nationalreview.com/articles/328432/why-stimulus-failed-arthur-c-brooks
right
just the taxpayers
Obama's over-promise and under-deliver on the disaster of the '09 stimulus foretells the same with Obamacare.
We are bankrupt--$17 trillion national debt and $100 trillion in unfunded liabilities. Where is all the money coming from to do what Klein wants?
!
Start a war? What did the Japanese attack on Pearl Harbor represent? Germany declared war on the US on December 11, 1941.
Oh and was that money paid to Michelle’s classmate too for the website?
There are huge (eye popping) taxes from insurance companies to uncle sam
Please elaborate on "TWO leisure classes". I count three, the very rich, the very poor on welfare, and three, formally middle class folks liberated by Obamacare to become poets"
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