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02/12/2011 12:13 AM ID: 87874 Permalink   

CBO: Obamacare Will Increase Unemployment


The Congressional Budget Office said that the health care law will reduce employment by 2021. The .5% reduction will be due to the fact that some people will no longer need to work just to have insurance.

The increase in unemployment will be equivalent to 800,000 people removing themselves from the labor pool.

Some of the provisions will encourage people to provide more labor, but the net effect is a loss of available labor.

    WebReporter: morganmacleod Show Calling Card      
ASSESS this news: BLOCK this news. Reason:
  technically not  
If someone isn´t seeking employment, they aren´t considered unemployed. Otherwise you´d have to consider students and retirees unemployed. They are not saying the healthcare law will cause employers to cut jobs and force people to look for new jobs, which is what unemployment is. I think the title is troll-baiting.
  by: justaperson     02/12/2011 12:33 AM     
  are you sure just a person?  
businesses having over a given number of employees must provide insurance. drop one person under that number, and you are not forced to provide insurance. has teh possibility of lots of businesses dropping some employees just to be unde rthat number. it could save them thousands each year.
  by: shannon853   02/12/2011 03:15 AM     
  you´re kidding right?  
thats a terrible argument
  by: syoware   02/12/2011 03:34 AM     
  Title is misleading  
People not seeking work is not unemployment, as justaperson pointed out.

In fact, the reduction of persons from the workforce, rather than positions from the labor market, would naturally serve to *lower* unemployment by 800,000 people -- assuming that companies replace everyone who quits the moment they don´t have to hang onto their job to have health insurance.

The title makes it sound as though Obamacare will actually force people out of their jobs. No -- because of Obamacare, some people will be able to leave jobs they don´t want but hold onto simply to have health insurance.
  by: Ben_Reilly     02/12/2011 03:42 AM     
I don´t believe in troll baiting and perhaps technically if you are not working and not seeking work, you are not unemployed by government standards but even the people I know who are trust fund babies and don´t work are unemployed. Their numbers just do not increase the official rate. To say otherwise is the same as arguing the unemployment rate has dropped simply because the person is no longer receiving benefits and has dropped off the radar.

I don´t believe the title is misleading and I don´t see how anyone can read it and come to the conclusion that Obamacare will force people out of their jobs, but I appreciate the critique.

I also do not agree with the Republican comment that the bill is job destroying. Just because a policy makes it enticing to quit work does not mean the job was destroyed. Perhaps the job compensation was inadequate or someone would just prefer to live off of the government handout. The job will either have to be filled with another person or the employer will have to find a way to produce the same product or service with the position unfilled.

I know that the law will increase the number of people without employer paid insurance because of the low cost of opting out but it never occurred to me that it would decrease the labor pool. If the law is so generous that people would choose to not work because of the benefits of the law, then I believe the benefits to be out of line with the reality of the marketplace. I know people who are content to merely scrape by on subsistence living but the fact that 800,000 people would drop out of the labor pool simply because they had free insurance is disheartening.
  by: morganmacleod     02/12/2011 04:36 AM     
Yeah this is probably the worst article I´ve read yet.

People who are unemployed or working low paying jobs are NOT doing so because of health insurance. They´re doing so, so that, ya know, they can pay for their rent/bills etc.

Unemployed can in a lot of cases already get medicare(or aid,whichever one isn´t for old and disabled).

Not to mention that if one person quits, then another unemployed will step up to that position.

There´s no increase in the numbers. Very misleading article.
  by: tizubythefizo   02/12/2011 09:37 AM     
  Speaking of the title  
"Obamacare" is not a word. You could easily write "CBO: Health care law..." instead of this partisan slang.
  by: H. W. Hutchins   02/12/2011 10:40 AM     
  @tiz and HW  
If you don´t believe the numbers or the study, then blame the CBO. I also find it hard to believe that the labor pool would shrink by 800,000 but that is what the study indicated.

Obamacare is a word, although it is currently considered slang. I suspect that within a couple of years it will make it into the OED. Just like many words, it takes time to become official. I don´t consider it partisan since many of my liberal friends and colleagues also refer to the health care law by the name Obamacare. In addition, since I do not identify with either party, I did not use the term as a pejurative.
  by: morganmacleod     02/12/2011 03:15 PM     
  You people are arguing semantics  
What it shows is people going for being lazy and having hard working people pay their ways.

I could care less if you classed them as unemployed or not based on them being lazy.
  by: moxpearl   02/12/2011 04:57 PM     
This has nothing to do with laziness. This has to do with what Obamacare is actually going to do, which is make it affordable to have health insurance without your employer having to help you pay for it -- which is what most insured Americans have now, and why a lot of companies can´t afford to hire more people.

Health insurance costs have skyrocketed over the past decade or so. Obamacare will bring the cost down through an explosion in the size of the customer pool through two primary mechanisms: No denial based on pre-existing conditions and the individual mandate.

When health insurance is affordable to people who might be, say, 60 years old and have $200,000 in savings, those people may be expected to live on their savings and buy their own health insurance rather than keep working until they´re eligible for Medicare.

Now here´s the crucial point -- 800,000 people leaving the workforce does NOT mean 800,000 jobs were cut. If I left my position on Monday, my company would likely replace me rather than just do without my position.

Workers are not the same thing as jobs. In fact, as pointed out above, reducing the size of the labor pool without commensurately reducing the size of the labor market (i.e. the number of jobs) makes it easier for everyone else who *is* looking for a job because they have no other options (i.e. the theoretical $200,000 in savings, or a trust fund like someone else mentioned).

As a final, general point -- it would be totally meaningless to measure unemployment as the percentage of Americans who simply don´t have a job, for whatever reason. That would include, of course:

1) Retirees.
2) Minors, either not old enough to work or who don´t need to work.
3) Contractors who only work when they need money.
4) Trust-fund babies.
5) Non-working housewives/husbands.

What we´re interested in (at least most of us) is this question: Of all the people who would prefer to have a full-time job right now, how many of them have been unable to get one?

That is what we consider unemployment to be, and it makes perfect sense.
  by: Ben_Reilly     02/12/2011 06:24 PM     
  one thing not being said is  
if you substract the high costs of illegals from that being charged paying individuals, the cost could really drop. medical costs are very high as illegals go to emergency rooms where they can not be refused treatment. obama case in more ways then one, forces money from working folks to cover non working and illegals. a higher cost to cover illegals. since if you can not afford obama care, it will be paid for you by those working through the taxes etc. the over all effect will be a drop in those employed and more and more increases to cover those that will not work to get free medical. it will promote more under the table jobs. businesses will drop employees to stay under the numbers required etc. the real solution was force illegals out, stop free medical setvices to illegals.
  by: shannon853   02/14/2011 01:15 AM     
Their employment will be sitting on their ass at home all day watching oxygen and waiting for a check in the mail. What else would you expect from the feds, a market-based reform?

  by: GrandmasterSifu   02/14/2011 05:02 AM     
I wish Obamacare would do what this article is saying so I can have a better chance of getting a job >.<
  by: nimira     02/14/2011 07:35 AM     
Straight from the CBO report:
"The legislation will reduce the amount of labor used in the economy by roughly half a percent, primarily by reducing the amount of labor that workers choose to supply." Key word being "choose".

As soon as you use the demeaning term "Obamacare" most people quit taking you serious. You also state "The increase in unemployment will be equivalent to 800,000 people removing themselves from the labor pool." So you are assuming these people are just going to stop working altogether therefore adding to the "unemployment" levels. Why can´t they be quitting their second or third job. I know Bush stated working three jobs while raising your children is "just great" and the "American dream" but it really isn´t. He was just playing the crowd and saying the first thing that came to his mind.
  by: gws1968     02/14/2011 06:10 PM     
“That means that if the reduction in the labor used was workers working the average number of hours in the economy and earning the average wage, that there would be a reduction of 800,000 workers,” Elmendorf said in an exchange with Rep. John Campbell (R-CA).

I stated the same information as in the report so I am assuming nothing.
  by: morganmacleod     02/16/2011 02:00 AM     
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