Note: Partially reposted from the McLean Parlor.
On Tuesday the nonpartisan Congressional Budget Office (CBO) released a whole heap of reports on various budget and policy projections. While the CBO expects the federal budget deficit to be larger than previously thought over the next decade (primarily due to a weaker economy), if you were anywhere within spitting distance of the internet the top storyline was about the agency’s report on the projected employment effects of the Affordable Care Act.
Namely, that the CBO expects the ACA to
kill 2.3 million jobs over the next decade. Actually the agency said nothing like that, but you’d be excused from thinking otherwise when reading any number of headlines in the media. As the Washington Post’s Glenn Kessler wrote, “this is not about jobs. It’s about workers — and the choices they make.” In a rare instance of Republicans choosing to be suddenly ignorant of supply-side economics, the employment effects that the CBO is projecting is all about the supply of labor — in short, the effect of workers choosing to work less or leave the workforce all together. This is pointedly not a projection of employers laying off workers because of the health care law. The distinction is important because the policy discussion that follows a proper understanding is entirely different than one where firms are demanding less labor.
The CBO expects that some workers, mostly low-wage, will voluntarily reduce the number of hours they work for two reasons; one, in which they choose to work less because they no longer need to work full-time just for the health benefits; two, because the implicit marginal tax rates are high enough (whether through Medicaid or exchange subsidy eligibility) to discourage working more hours. To a much smaller extent the agency also expects some workers to leave the workforce altogether. Yet this is mostly a estimate of people choosing leisure over wage labor.
Now whether that is a good phenomenon or not will largely rest on whatever values and ideology a person holds towards working a job and things like high effective marginal tax rates. For my part that’s generally an interesting, more complex, discussion. That is to say, the employment effects on the future supply of labor due to the ACA could be a really fruitful, illuminating, debate. But that’s a lot more nuanced, and less politically useful, as a talking point cudgel than “Obamacare is a jobs killer.” Which to my experience on Tuesday is mostly what the right exercised yesterday — Ross Douthat being the notable exception.
I think having an argument over something that exists (what the CBO actually wrote) versus something that does not exist (what the CBO did not write) is more desirable.
Over at The McLean Parlor I’ve got a roundup of links, though not necessarily endorsements, from what I’ve read about Tuesday’s report on the ACA so far.