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Wednesday, February 19, 2014
She Dreamed Obamacare Was Harmless
By Heritage Foundation @ 12:24 PM :: 2644 Views :: Health Care, Labor

She Dreamed Obamacare Was Harmless

Heritage Foundation, 02/19/2014

Obamacare is working, and it’s not costing any jobs.

Shhh…keep quiet, or you’ll wake Health and Human Services Secretary Kathleen Sebelius from her dream.

“There is absolutely no evidence, and every economist will tell you this, that there is any job loss related to the Affordable Care Act,” she said on Monday.

In the land of the waking, Heritage’s James Sherk—an economist who doesn’t fall under “every economist,” according to Sebelius—plainly states that “The Affordable Care Act has discouraged companies from creating jobs and workers from accepting them.”

There are mountains of evidence—from businesses’ reports to the Federal Reserve to this list compiled by Investor’s Business Daily. And the stories keep coming: Just yesterday, an industry trade group estimated that Obamacare’s medical device tax has killed 33,000 jobs.

Obamacare’s job vise squeezes Americans from both sides: the employer side and the employee side.

Employers

Despite delays of the employer mandate, Sherk and Jacob Deveney write, “Employers are responding to the uncertainty of the Obamacare rollout by slashing hours and limiting their new hires.” That includes state and local governments, too.

Why? Sherk explains:

Obamacare will also encourage businesses to create part-time jobs instead of full-time jobs. Employers only pay the penalty on full-time workers. If they cut workers’ hours to part-time status, they owe no fines. So full-time jobs will become harder to come by when the penalties kick in.

Employees

While employers might not be hiring (or might be hiring only for part-time positions), would-be employees have a say in this equation, too. And Obamacare actually encourages them to work fewer hours.

The Congressional Budget Office recently reported that the law’s health care subsidies would push the equivalent of 2.3 million workers out of the workforce. Simply put, making less money means you can qualify for more taxpayer-funded Obamacare subsidies. But if you start making more, your subsidy drops.

These Americans find working more does not pay if it means fewer benefits. So they either drop to part-time or drop out of the labor market. They would prefer to work, but not if the government claws back three-quarters of what they would make through greater taxes and reduced benefits.

Perhaps Obamacare is actually a match made in heaven—it makes employers want to hire for fewer hours and employees want to work fewer hours. But that’s acceptable only if unemployed Americans sound like a dream come true.

Read the Morning Bell and more en español every day at Heritage Libertad.

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