CBO: Health-care law will mean 2 million fewer workers

[Redfairen]

47. LA Times: "Why the new CBO report on Obamacare is good news"

http://touch.latimes.com/#section/-1/article/p2p-79163149/

The CBO projects that the act will reduce the supply of labor, not the availability of jobs. There's a big difference. In fact, it suggests that aggregate demand for labor (that is, the number of jobs) will increase, not decrease; but that many workers or would-be workers will be prompted by the ACA to leave the labor force, many of them voluntarily.

As economist Dean Baker points out, this is, in fact, a beneficial effect of the law, and a sign that it will achieve an important goal. It helps "older workers with serious health conditions who are working now because this is the only way to get health insurance. And (one for the family values crowd) many young mothers who return to work earlier than they would like because they need health insurance. This is a huge plus."

The ACA will reduce the total hours worked by about 1.5% to 2% in 2017 to 2024, the CBO forecasts, "almost entirely because workers will choose to supply less labor--given the new taxes and other incentives they will face and the financial benefits some will receive."  That translates into about 2.5 million full-time equivalents by 2024--not the number of workers, because some will reduce their number of hours worked rather than leaving the workforce entirely.

The overall impact on the community will be muted, moreover, because most of that effect will be seen at the lowest levels of the wage-earning scale. The effect will be "small or negligible for most categories of workers," the CBO says, because there will be almost no impact on workers who get their insurance from their employers or who earn more than 400% of the federal poverty line (for a family of three, that's $78,120), the point at which eligibility for federal premium disappears.