Obamacare's Disincentives to Work Are a Good Thing, NPR Spins

March 4, 2014 - 8:32 PM

Obamacare

In this March 23, 2010 file photo, President Barack Obama signs the Affordable Care Act in the East Room of the White House in Washington. (AP Photo)

(CNSNews.com) – The Congressional Budget Office’s recent report on the Affordable Care Act said the law's subsidies will reduce the incentive to work for lower-wage employees, and because some people will chose not to work at all, the number of jobs in the economy will be about.2.5 million less by 2024 than it would be without Obamacare.

“The Affordable Care Act will change the way millions of Americans think about their jobs,” National Public Radio reported on its Feb. 28 "Morning Edition."

NPR, citing the CBO report, said the law will give some people the option to retire early and others the flexibility to work less.

It named a woman, Karin Warren, who “hated her full-time job as a technical writer for a technology company in Corvallis, Oregon.”

“I was experiencing some pretty heavy job burnout,” Warren told NPR. “It's a very stressful job, and I was very unhappy.”

After a battle with breast cancer, Warren wanted to work less but needed her health insurance. “Then in November of 2012, when President Obama was reelected, Warren says she realized the Affordable Care Act would be implemented, and her situation could change,” the story continued.

“I cried that night,” said Warren, who quit her job. “I was so happy, because I knew that was my ticket to freedom.”

Warren now has a part-time job, the nature of which is not reported. She also now is eligible for a subsidy to help pay for her Obamacare.

“So, now I'm working happily a half-time job,” Warren said. “I'm more relaxed and feel healthier than I did before.

“And my health insurance is in place, and it's affordable, and I'm in bliss,” said Warren, who is now paying $131 a month for insurance rather than the $500 a month she would have paid with her previous salary.

Then there is Todd Ryder, a database administrator in Helena, Mont., who decided Obamacare would let him retire at 52.

“I've always wanted to and thought about retiring early, and then with this Affordable Care Act situation, it looked kind of promising for me in terms of having that flexibility, you know, of having medical coverage without having to have employment,” Ryder tells NPR.

Reporter Steve Ydstie also talked to a Massachusetts Institute of Technology labor economist.

“If we move into a world, all of a sudden, where you can get health care relatively affordably through the individual marketplace, on the one hand, and in addition, you receive a subsidy for that, that's going to cause some people to say, well, I don't need to work as many hours,” David Autor said.

The CBO report states the facts this way:

“The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.

“Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA.

“The decline in full-time-equivalent employment stemming from the ACA will consist of some people not being employed at all and other people working fewer hours; however, CBO has not tried to quantify those two components of the overall effect.

“The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week). “

The NPR story ends with praise for these developments in the U.S. economy.

“Added dollars spent on health care because of the ACA will create some jobs and growth, and there are some who argue providing health insurance will create happier, healthier and more productive workers,” the story concluded. “That may turn out to be true, says Autor, and he agrees there are phys[ical] benefits to individuals.

“But so far, he says, there's no hard evidence of actual improvements to health or overall economic activity.”