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CBO: Obamacare would lead employees to work less

By Kevin G. Hall, Lesley Clark and Tony Pugh
McClatchy Washington Bureau

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WASHINGTON: A government analysis sparked fierce debate Tuesday, projecting that the Affordable Care Act will lead American workers to voluntarily put in fewer hours on the job, a total that would add up to the equivalent of as many as 2.5 million jobs over the next decade.

The nonpartisan Congressional Budget Office said it expected total employment and compensation in the whole economy to increase over the next 10 years. But “that increase will be smaller than it would have been in the absence of the ACA,” it said in a report.

The lower work total will come from people who choose not to be employed or to reduce their hours in order to maximize government-provided benefits under the new law. Such a decline is a common phenomenon in social welfare programs, according to the agency.

The projected reduction in hours over 10 years could translate into the equivalent of 2 million fewer full-time jobs in 2017 than otherwise expected and 2.5 million fewer full-time jobs by 2024, the CBO said. While there’s no way to be certain in advance how many people would leave the workforce altogether and how many would simply reduce their hours, the estimates reflect new thinking on how the Affordable Care Act might ripple through labor markets.

The report set off a pitched debate, with Republicans simplifying the analysis to claim that it would eliminate jobs, and Democrats saying it was good that workers would have the flexibility to choose to work less.

“The middle class is getting squeezed in this economy, and this CBO report confirms that Obamacare is making it worse,” said House Speaker John Boehner, R-West Chester.

In the near term the health-care revamp will be a “boost to demand for goods and services,” CBO Director Douglas Elmendorf said. That translates into more jobs, though neither he nor the White House could say how many.

Also, the CBO expects 1 million fewer people than once predicted — 6 million — to gain coverage through marketplaces this year, because of major technical problems with the October debut of the federal website HealthCare.gov.


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