CBO estimates 2.3 million jobs lost due to ACA

edk99

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CBO estimates 2.3 million jobs lost due to ACA

It is unfortunate the GOP couldn't stop this train from leaving the station. Now that it has it is destroying everything in its path. Bravo democrats for such a well thought out and crafted set of laws to "fix" healthcare in this country.

Obamacare will push 2 million workers out of labor market: CBO

Obamacare will push the equivalent of about 2 million workers out of the labor market by 2017 as employees decide either to work fewer hours or drop out altogether, according to the latest estimates Tuesday from the Congressional Budget Office.
That’s a major jump in the nonpartisan budget agency’s projections and it suggests the health care law’s incentives are driving businesses and people to choose government-sponsored benefits rather than work.
“CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 to 2 percent during the period from 2017 to 2024, 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,” CBO analysts wrote in their new economic outlook.
The scorekeepers also said the rollout problems with the Affordable Care Act last year will mean only 6 million people sign up through the state-based exchanges, rather than the 7 million the CBO had originally projected.


Read more: http://www.washingtontimes.com/news/2014/feb/4/cbo-obamacare-push-2m-workers-out-labor-market/#ixzz2sMrPSGcA
Follow us: @washtimes on Twitter
CBO nearly triples estimate of working hours lost by 2021 due to Affordable Care Act

A historically high number of people will be locked out of the workforce by 2021, according to a report by the Congressional Budget Office released Tuesday.

President Barack Obama's signature healthcare law will contribute to this phenomenon, CBO said, citing new estimates that the Affordable Care Act will cause a larger than-expected reduction in working hours - eliminating the equivalent of about 2.3 million workers in 2021 versus a previous estimate of an 800,000 decline.
"CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 to 2 percent during the period from 2017 to 2024, 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," said the report.

http://www.cnbc.com/id/101352868
 

citizenzen

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Mar 22, 2010
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Now that it has it is destroying everything in its path.
Destroying everything in its path = "... reduce the total number of hours worked, on net, by about 1.5 to 2 percent ..."?

Wow. Hyperbolic much?

If you worked a 40 hour work week, which is 2,400 minutes, that means you'll work 48 minutes [2%] that week less.
 

iJohnHenry

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Mar 22, 2008
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Destroying everything in its path = "... reduce the total number of hours worked, on net, by about 1.5 to 2 percent ..."?

Wow. Hyperbolic much?

If you worked a 40 hour work week, which is 2,400 minutes, that means you'll work 48 minutes [2%] that week less.
Make that a Friday afternoon, please. :)
 

Zombie Acorn

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http://www.cnbc.com/id/101352868

President Barack Obama's signature health-care law will contribute to this phenomenon, the CBO said, citing new estimates that the Affordable Care Act will cause a larger-than-expected reduction in working hours—eliminating the equivalent of about 2.3 million workers in 2021.
In 2011, the CBO estimated the law would cause a reduction of about 800,000 full-time equivalent workers.

(Read more: A Medicare program reaps $380 million in savings, officials say)

"CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 to 2 percent during the period from 2017 to 2024, 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," said the report.
"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," it added.
Anyone know any Americans who are thinking about stopping the "supply of their labor" voluntarily since ACA was instated?
 

lannister80

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Apr 7, 2009
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This is a GOOD thing. We're finally starting to decouple having a job and being able to afford insurance.

The Dad of a friend of mine is in his 60s and "retired", but works at Home Depot so that he can get health insurance through work. Hopefully the exchange will be cheap enough that he can get adequate coverage without a job he doesn't want.
 
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ebow

macrumors 6502a
I don't think the headline about so many jobs being lost is a good fit to the report, especially this statement:
...almost entirely because workers will choose to supply less labor
If workers voluntarily cut back their own hours, but the work still needs to be done, then won't employers need to hire more people? And wouldn't that be a good thing?
 

chown33

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Here's the actual report (well, the cited section of the overall report):
http://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-breakout-AppendixC.pdf

What the "reduced supply of hours" mainly boils down to is the effects of insurance subsidies, which decrease as one earns more. So if the extra income from more hours worked doesn't offset the loss of the subsidy percentage, a worker would end up netting less money while working more hours.

The point at which this happens will depend on one's wages, dependents, etc. It would be interesting to see some graphs of how this would actually play out. This would need information on the subsidy rates as wages vary, and a graphing app.

Things like this have happened before, and will certainly happen again:
http://en.wikipedia.org/wiki/Perverse_incentive
...
Paying medical professionals and reimbursing insured patients for treatment but not prevention encourages the ignoring of medical conditions until treatment is required.[4]


It's worth reading the report to see all the things that are left out of the CBO estimate, such as: potential increases in productivity due to improved worker health, changes in employee growth to stay below the 50-employee limit for penalities, increased productivity of health-care workers, etc.
 

rdowns

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Jul 11, 2003
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The 1.5%-2% decrease in job hours projected by the CBO is mostly people voluntarily leaving the marketplace, not jobs being cut. Those are people who are either reducing hours or quitting a second job they no longer need to afford health coverage. How did we spin this into lost jobs?
 

Zombie Acorn

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The 1.5%-2% decrease in job hours projected by the CBO is mostly people voluntarily leaving the marketplace, not jobs being cut. Those are people who are either reducing hours or quitting a second job they no longer need to afford health coverage. How did we spin this into lost jobs?
I wonder if this will be the same type of "volunteering" that we consider when looking at unemployment rates where if you get beaten down enough they stop counting you as a "willing" job finder.
 

hulugu

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The title of both the CNBC article and the OP is framing the CBO's analysis the wrong way. The number of people working will decline, not the number of jobs. A solid percentage of people are working entirely to keep their insurance or to pay for it, and thus the shift will take some people out of the workforce who don't want to be there.

As M. Yglesias at Slate wrote:

...Obamacare will kill jobs in the same way that Social Security kills jobs. By making it easier for people in certain circumstances to get by without a job. But your mileage may vary on this. The point, however, is that we're talking about people quitting not about people getting fired.
 

edk99

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The title of both the CNBC article and the OP is framing the CBO's analysis the wrong way. The number of people working will decline, not the number of jobs. A solid percentage of people are working entirely to keep their insurance or to pay for it, and thus the shift will take some people out of the workforce who don't want to be there.

As M. Yglesias at Slate wrote:
Which basically translates into the projections of subsidies low income people get will be 3x more then what the CBO initially projected due to these people working less or not working at all. So instead of these people being a productive part of society, Obamacare will shrink that and grow the moocher class.

I can't see how anyone can spin this as good news that some people will by choice work less or quit work because they now don't have to work to pay for or get health insurance through their work place. Now they can "get by" with no job and government subsidizes for healthcare. That sounds like a good thing?
 

0007776

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Which basically translates into the projections of subsidies low income people get will be 3x more then what the CBO initially projected due to these people working less or not working at all. So instead of these people being a productive part of society, Obamacare will shrink that and grow the moocher class.

I can't see how anyone can spin this as good news that some people will by choice work less or quit work because they now don't have to work to pay for or get health insurance through their work place. Now they can "get by" with no job and government subsidizes for healthcare. That sounds like a good thing?
I think the white house did a decent job of showing why this might be good news, unless you think that people should have to work until they die and never retire.

"This is a choice on the part of workers," Furman said. "I have no doubt that if, for example, we got rid of Social Security and Medicare, there are many 95-year-olds that would choose to work more. I don't think anyone would say that was a compelling argument to eliminate Social Security and Medicare," Furman said.
Plus it doesn't seem as if this will have a negative effect on deficits either.

On the larger question of whether the health care law helps or hurts the budget picture, the CBO is sticking to its last analysis, done in 2012, that the law overall reduces federal deficits, Elmendorf said.
http://www.npr.org/blogs/itsallpolitics/2014/02/04/271636859/more-access-to-health-care-means-more-people-can-work-less
 

thewitt

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The spin from those who believe they are "owed" by the "system" will always make this sound like good news. Since when was excellence ever achieved without hard work? Never. It's a crock and more spin on higher costs of goods and ultimately more jobs moving overseas due to increased labor costs.
 

citizenzen

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I can't see how anyone can spin this as good news that some people will by choice work less or quit work because they now don't have to work to pay for or get health insurance through their work place. Now they can "get by" with no job and government subsidizes for healthcare. That sounds like a good thing?
... this might be good news, unless you think that people should have to work until they die and never retire.
edk99, I'd consider that well spun.

mrkramer, thank you for spreading the good news.

I wonder if conservatives will hear it.

The spin from those who believe they are "owed" by the "system" will always make this sound like good news. Since when was excellence ever achieved without hard work? Never. It's a crock and more spin on higher costs of goods and ultimately more jobs moving overseas due to increased labor costs.
No. I guess not.
 

samiwas

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I think the white house did a decent job of showing why this might be good news, unless you think that people should have to work until they die and never retire.
You'd be surprised. I've seen people on forums claim that retirement is a figment of a bygone era and that we should work until we are no longer physically able to any more, or until we die.

I think thewitt is probably one of those people. Of course, I have no idea who all these people are who think they are "owed" something. I guess he just copied and pasted from something else.

I'm pretty excellent, and I don't work real hard.
 

Michael Goff

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Which basically translates into the projections of subsidies low income people get will be 3x more then what the CBO initially projected due to these people working less or not working at all. So instead of these people being a productive part of society, Obamacare will shrink that and grow the moocher class.

I can't see how anyone can spin this as good news that some people will by choice work less or quit work because they now don't have to work to pay for or get health insurance through their work place. Now they can "get by" with no job and government subsidizes for healthcare. That sounds like a good thing?
How do places with universal healthcare retain a workforce in your world?
 

hulugu

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Which basically translates into the projections of subsidies low income people get will be 3x more then what the CBO initially projected due to these people working less or not working at all. So instead of these people being a productive part of society, Obamacare will shrink that and grow the moocher class.
The fact that you've drawn a dichotomy between "moocher class" and the rest is entirely the problem. It's a false one that ignores the millions of people who should retire (and make room for the younger workers behind them), the millions who want to stop working because of children, as well as students, and really anyone who wants to stop working, but couldn't because they would lose their health insurance.

As Yglesias pointed out, a man who is 55 and has amassed enough to retire still had to work under the previous system to ensure his health care and so did a new mom. Both of these people can now *choose* to work or not, but won't lose their insurance.

This could be a good thing and I think it's too early to tell how this will affect the economy in the long-term, but arguing that people will just become "moochers" is ridiculous and makes a hash of any real description of the socio-economics of the American economy.
 

Eraserhead

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The fact that you've drawn a dichotomy between "moocher class" and the rest is entirely the problem. It's a false one that ignores the millions of people who should retire (and make room for the younger workers behind them), the millions who want to stop working because of children, as well as students, and really anyone who wants to stop working, but couldn't because they would lose their health insurance.

As Yglesias pointed out, a man who is 55 and has amassed enough to retire still had to work under the previous system to ensure his health care and so did a new mom. Both of these people can now *choose* to work or not, but won't lose their insurance.

This could be a good thing and I think it's too early to tell how this will affect the economy in the long-term, but arguing that people will just become "moochers" is ridiculous and makes a hash of any real description of the socio-economics of the American economy.
Aren't the moochers the rich anyway?
 

jnpy!$4g3cwk

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Destroying everything in its path = "... reduce the total number of hours worked, on net, by about 1.5 to 2 percent ..."?
--

If you worked a 40 hour work week, which is 2,400 minutes, that means you'll work 48 minutes [2%] that week less.
This is a GOOD thing. We're finally starting to decouple having a job and being able to afford insurance.

The Dad of a friend of mine is in his 60s and "retired", but works at Home Depot so that he can get health insurance through work. Hopefully the exchange will be cheap enough that he can get adequate coverage without a job he doesn't want.
There are millions of people in this situation-- working only to get access to health insurance. If some more of these folks (my peers) retired, maybe it would become easier for young people to find entry level jobs-- who knows?

In any case, edk99 and most of the GOP are completely misinterpreting this.

I don't think the headline about so many jobs being lost is a good fit to the report, especially this statement:


If workers voluntarily cut back their own hours, but the work still needs to be done, then won't employers need to hire more people? And wouldn't that be a good thing?
Here's the actual report (well, the cited section of the overall report):
http://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-breakout-AppendixC.pdf

--

It's worth reading the report to see all the things that are left out of the CBO estimate, such as: potential increases in productivity due to improved worker health, changes in employee growth to stay below the 50-employee limit for penalities, increased productivity of health-care workers, etc.
The 1.5%-2% decrease in job hours projected by the CBO is mostly people voluntarily leaving the marketplace, not jobs being cut. Those are people who are either reducing hours or quitting a second job they no longer need to afford health coverage. How did we spin this into lost jobs?
The GOP reaction to this is par for the course. If Obama squared the circle, they would attack him for it.
 

Zombie Acorn

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Let's assume that it is due to more affordable healthcare for these older people holding onto jobs for benefits, something I don't think we have completely seen yet. Not only will we lose 2.3 million jobs, but due to the subsidies provided you are asking for the younger generations to pick up the tab via taxes as well as through higher premiums.

What kind of effect is this going to have on a generation that has already been pounded into the ground by high tuition rates and fewer job opportunities?
 

hulugu

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Let's assume that it is due to more affordable healthcare for these older people holding onto jobs for benefits, something I don't think we have completely seen yet. Not only will we lose 2.3 million jobs, but due to the subsidies provided you are asking for the younger generations to pick up the tab via taxes as well as through higher premiums.
First, younger generations were already "picking up the tab" on health care. Remember that projections for health care spending were going through the roof before ACA was implemented.

Secondly, the CBO report is not reporting a loss of 2.3 million jobs, but rather that 2.3 million people will leave the workforce. This could mean that 2.3 million positions will become available as older workers leave and this also means that thousands could create small businesses or freelance because they don't have to worry about health care, creating more businesses in the process.

...What kind of effect is this going to have on a generation that has already been pounded into the ground by high tuition rates and fewer job opportunities?
Well, for those at the lowest part of the ladder, health care costs will drop and taxes will remain steady.
 

Michael Goff

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Let's assume that it is due to more affordable healthcare for these older people holding onto jobs for benefits, something I don't think we have completely seen yet. Not only will we lose 2.3 million jobs, but due to the subsidies provided you are asking for the younger generations to pick up the tab via taxes as well as through higher premiums.

What kind of effect is this going to have on a generation that has already been pounded into the ground by high tuition rates and fewer job opportunities?
If 2.3 million people are quitting, those jobs aren't disappearing >_>;
 

Zombie Acorn

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First, younger generations were already "picking up the tab" on health care. Remember that projections for health care spending were going through the roof before ACA was implemented.

Secondly, the CBO report is not reporting a loss of 2.3 million jobs, but rather that 2.3 million people will leave the workforce. This could mean that 2.3 million positions will become available as older workers leave and this also means that thousands could create small businesses or freelance because they don't have to worry about health care, creating more businesses in the process.



Well, for those at the lowest part of the ladder, health care costs will drop and taxes will remain steady.
Unless you can prove that we have 2.3 million trained people to fill those positions and also that these companies will fill the vacancies I can't see how you could project no negative impact. Tuition and training is getting more expensive by the year.

Young workers are going to be paying for the government subsidies and padding the profits for insurance companies while supporting the losses due to these older customers.

Sounds like a good way for the elderly to take the younger generation to the cleaners again while sitting on their nest egg making little income.