Charles Krauthammer: Obamacare job losses were utterly predictable
02/14/2014 5:39 PM
02/14/2014 5:39 PM
In the ongoing saga of the Affordable Care Act, oddly referred to by Democrats as the law of the land even as it is amended at will by presidential fiat, we are beginning to understand the extent of its war on jobs.
First, the Congressional Budget Office triples its estimate of the drop in the workforce resulting from the disincentive introduced by Obamacare’s insurance subsidies: 2 million by 2017, 2.3 million by 2021.
Democratic talking points gamely defend this as a good thing because these jobs are being given up voluntarily. House Minority Leader Nancy Pelosi, D-Calif., spoke lyrically about how Obamacare subsidies will allow people to leave unfulfilling jobs to pursue their passions: “Think of an economy where people could be an artist or a photographer or a writer without worrying about keeping their day job in order to have health insurance.”
It’s an idyllic vision except for one thing: The taxes of the American factory worker – grinding away dutifully at his repetitive mind-numbing job – will be subsidizing the voluntary unemployment of the artiste in search of his muse. A rather paradoxical position for the party that poses as tribune of the working man.
In the traditional opportunity society, government provides the tools – education, training and various incentives – to achieve the dignity of work and its promise of self-improvement and social mobility. In the new opportunity society, you are given the opportunity for idleness while living parasitically off everyone else.
The honest liberal reply to the CBO report is that a disincentive to work is inherent in any means-tested government benefit. It’s the unavoidable price of helping those in need, because for every new dollar you earn, you lose part of your subsidy and thus keep less and less of your nominal income.
That’s inevitable. And that’s why we have learned to tie welfare, for example, to a work requirement. Otherwise, beneficiaries could choose to live off the dole forever. That’s why the 1996 Gingrich-Clinton welfare reform succeeded in reducing welfare rolls by two-thirds. It is not surprising that the same Obama administration that has been weakening the work requirement for welfare is welcoming the disincentive to work inherent in Obamacare.
But Obamacare’s war on jobs goes beyond voluntary idleness. The administration is now conceding, inadvertently but unmistakably, Obamacare’s other effect – involuntary job loss. On Monday the administration unilaterally postponed and weakened the employer mandate, already suspended through 2015, for yet another year.
But doesn’t this undermine the whole idea of universal health coverage? Of course it does, but Obamacare was so structured that it is crushing small business and killing jobs. It creates a major incentive for small businesses to cut back to under 50 employees to avoid the mandate. Your business becomes a 49er by either firing workers or reducing their hours to fewer than 30 a week. Because that doesn’t count as full time, you escape both the employer mandate to buy health insurance and the fine for not doing so.
With the weakest recovery since World War II, historically high chronic unemployment and a shockingly low workforce participation rate, the administration correctly fears the economic consequences of its own law.
Conservatives have been warning about this for five years. This is not rocket science. Both the voluntary and forced job losses were utterly predictable.
Pelosi insisted we would have to pass the law to know what’s in it. Now we know.