The latest blow to Obamacare is a report from the Congressional Budget Office (CBO) that the Affordable Care Act (Obamacare) will result in the equivalent of 2 million fewer jobs in 2017, and rising to 2.5 million fewer jobs in 2024.
I use the term “equivalent” because the CBO estimate is based on hours. So it may not mean that 2 million people will lose their job by 2017 because of Obamacare, but that we may see many more millions have reduced hours.
Some of the latest stories on the CBO analysis are saying that the whole thing isn’t as bad as it sounds, because these will be voluntary job reductions. The CBO’s report is estimating these reductions in hours partially because of Obamacare’s subsidies for those with lower incomes. Therefore, people will voluntarily reduce their hours and their reportable income so that they can qualify for health insurance subsidies under Obamacare.
While perhaps it seems slightly positive that reduced hours will be voluntary by the employees, as opposed to having hours reduced by the employers, is this really anything to celebrate?
Aside from the moral aspects, this is the main problem with government welfare programs and socialism in general. They provide perverse incentives.
In this case, the government program – Obamacare – is encouraging people to work less. It is a distortion of the market and it results in less productivity.
Encouraging less productivity means that we will have a lower standard of living than we otherwise would have had. It means that we have to spend more on basic needs, while having less in the way of luxuries. It also means greater poverty.
Unfortunately, we are focused on jobs as a major side effect only because the government has managed to destroy so many jobs in the first place with unemployment benefits, other welfare, minimum wage laws, and other labor regulations.
There should be plenty of jobs for anyone who wants to work in this world. We live in a world with scarce resources and there is always labor that is needed to improve our standard of living. Until we have robots and computers doing everything for us, this will always be the case.
We should be concerned about productivity, as that is what ultimately determines the standard of living for a society. But it is understandable that so many people are concerned about jobs, only because the government has made it so difficult for people to work.
Even with the stories from Obama supporters promoting the idea that the CBO’s estimates are due to voluntary reductions, I still believe that Obamacare will result in a lot of employers cutting jobs. Plus, there will be a lot of jobs that are never created in the first place because of Obamacare.
Obamacare is just one more regulatory and tax hurdle that employers face and that will affect their decision in hiring. As a result of Obamacare, there will be certain jobs that will never appear that we will never know about. There will be certain products and services that are never offered that we will never know about.
I think it’s great that the defenders of Obamacare are having to grasp at straws once again. This is just another major mark against the whole scheme.
If this estimate of lost jobs had come from some libertarian or conservative economist, it would have been dismissed by many. But since it was put out by the CBO, which ironically was used for projections regarding Obamacare when it was being sold to the American people, the Obamacare defenders can’t dismiss the report as being a partisan attack against their program.
First, it was the dysfunctional website. Then it was seeing millions of people lose their insurance due to Obamacare mandates. This CBO report is the third major blow. We still have more to come, especially as more people start paying increased premiums with decreased benefits.
I have been saying all along that Republicans are not going to defeat Obamacare. Obamacare is going to defeat Obamacare.