Government Watch

Unemployed by ObamaCare

from – The Wall Street Journal

Most of the political class seems to have decided that ObamaCare is working well enough, the opposition is fading, and the subsidies and regulation are settling in as the latest wing of the entitlement state. This flight from reality can’t last forever, especially as the evidence continues to pile up that the law is harming the labor market.

On Thursday the Federal Reserve Bank of Philadelphia reported the results of a special business survey on the Affordable Care Act and its influence on employment, compensation and benefits. Liberals claim ObamaCare is of little consequence to jobs, but the Philly Fed went to the source and asked employers qualitative questions about how they are responding in practice.

The bank reports that 78.8% of businesses in the district have made no change to the number of workers they employ as the specific result of ObamaCare and 3% are hiring more. More troubling, 18.2% are cutting jobs and employees. Some 18% shifted the composition of their workforce to a higher proportion of part-time labor. And 88.2% of the roughly half of businesses that modified their health plans as a result of ObamaCare passed along the costs through increasing the employee contribution to premiums, an effective cut in wages.

Those results are consistent with a New York Fed survey, also out this week, that asked “How, if at all, are you changing (or have you changed) any of the following because of the effects that the ACA is having on your business?” For “number of workers you employ,” 21% of Empire State manufacturers and 16.9% of service firms answered “reducing.”

To complete the triptych, an Atlanta Fed poll earlier this month found that 34% of businesses planned to hire more part-time workers than in the past, mostly because of a rise in the relative costs of their full-time colleagues. ObamaCare may be contributing to that surge to the extent the law’s insurance mandates and taxes increase spending on fringe benefits for people who work more than 30 hours.

Liberals will dismiss this as merely anecdotal or of minor impact, but it makes sense that ObamaCare’s labor effects would be concentrated in some industries with relatively low-wage or marginal workers. The data points also help explain why the number of people employed part-time surged by 12% during the recession but the rate hasn’t fallen even as the economy has improved. Or why labor force participation is the lowest since the late 1970s.

Chief White House economist Jason Furman put out a report in July that attempted to explain this collapse in the share of Americans working. He attributed about half the decline to an aging population and a sixth to the conventional expected result of the downturn. But he simply threw up his hands and assigned a third of the responsibility to an “unexplained” category.

Our view is that Mr. Furman’s gnomes were wrong to gloss over government-fueled labor distortions like ObamaCare. People are responding at least in part to the incentives to work fewer hours or not at all, as the research of University of Chicago economist Casey Mulligan on marginal tax rates has shown. But there are also simply fewer jobs available that would have been created in the past, as the Fed surveys show.

Slow growth is the great tragedy of the Obama Presidency, and maybe these findings will eventually get past the liberal Iron Dome of only positive thoughts.


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Walter Pearson
8 years ago

Forced Obama Care and the way it was passed into law is unconstitutional and against the law and must be repealed

Robert Qualls
8 years ago

I agree that we don’t need Hillary & need someone more market-oriented. And while Dr. Carson is a great man & I’m sure was an outstanding cardiologist, do we need another person with NO “political leadership” experience? Don’t get me wrong, I don’t want a career politician who ran for State Assembly right out of law school and has been working their way up the ladder to State Senate, U.S. House, and U.S. Senate for thirty or forty years, but neither do I want someone who has held no leadership positions prior to President, as that is what we’ve got now — someone who I don’t believe chaired as much as a subcommittee in either the Illinois or U.S. Senate, & now it really shows. While I certainly don’t think that Dr. Carson would attempt to “lead from behind” the way the incumbent does, I really think that we need either a Governor or a Senator who used to have his own business rather than a doctor, even a really good one who understands how much “free” health care really costs.

Regular Joe
8 years ago
Reply to  Robert Qualls

Robert,

Well said. My only counterpoint would be that it’s not inexperience that is the issue with our current President. Even if he had been in politics another 20 years he’d still lack the talent for the job. I’m pulling for Dr. Carson. He’s one of the few that can and will articulate the compassion of the conservative position.

Doc
8 years ago
Reply to  Robert Qualls

I remember some time ago asking a gentleman how he became so successful and the reply was I surrounded myself with a great financial advisor, attorneys, and those with business savvy. No man is an island but when one is surrounded by competent people in the decision making process the end result is often success. Who has Obama surrounded himself with? As to Dr. Carson’s expertise. Remember he is but one person in that operating room surrounded by professionals. The outcome is predicated by the expertise in that operating room supporting Dr. Carson. Not saying he could become President but he certainly has the wisdom to understand the root cause of a problem and provide a permanent fix. He has a way to articulate his message and connect with his audience. Something we are seriously lacking right now is real passion from the heart for this great country, not just fancy words with empty promises from the WH.

Rik
8 years ago

Maybe the economy is improving in “red states” with republican governors, but here in “blue state” California, and I do stress the word “blue” … The economy STINKS!!! Since 2007, California has not even created 25,000 new jobs compared to well over a million in Texas alone during the same time period! … But at least we can die in nice weather.

Obamacare is killing the senior market! … Why? … Because most seniors live on a fixed income, where Obamacare has raised everybody’s insurance premiums, increased deductibles and prescription drug prices to where most seniors have seen substantial out-of-pocket expense increases. Add the increased food prices for many staple items such as, milk, eggs, flour, orange juice, coffee, teas, fruits and vegetables, etc, etc by an average cost of close to 50% more since Obama began his dictatorship. Gasoline costs have doubled since Bush stepped down.

This is a recipe for a national depression! … I can’t wait till Obama becomes unemployed! ! ! ! … But it won’t be soon enough for me!

Frugalone
8 years ago
Reply to  Rik

I agree RIK and I am praying we do not get Hillary Clinton as our next President. I am praying that Dr. Ben Carson will run for President and wins.

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