By now, you have no doubt heard the story that the Affordable Care Act will result in the loss of 2 million American jobs. With any luck, you’ve also heard that this story is completely and totally inaccurate.
This Republican fable has its origins in a Feb. 4 report from the Congressional Budget Office, which looked at the effect that Obamacare could have on the labor market. Here’s the salient language from the report that set the talking heads into overdrive:
“Reduced incentives to work attributable to the Affordable Care Act — with most of the impact arising from new subsidies for health insurance purchased through exchanges — will have a larger negative effect on participation (in the labor market).”
To conservative eyes, this equates to welfare queens (or perhaps kings) growing fat off the teat of public assistance. But we’re talking about fractional changes here, not radical ones.
It’s true that, for some people, it will make more financial sense to earn slightly less to avoid higher taxes and receive larger subsidies. But how much less? The CBO report estimates it at about 1 percent. That’s right, “a net reduction in aggregate labor compensation of roughly 1 percent over the period from 2017 to 2024.”
For someone making $12 an hour (that’s about $369 in take-home pay per week), this would work out to working 15 minutes less per week.
Of course, the 1 percent figure is an average, but it still raises the point of what a fine line this is to walk. Even for those who might have an incentive to shave their earnings, how realistic is it to actually do it? (Imagine asking your boss for a 1 percent pay cut.)
And this is only looking at the actual content of what the report says. Plenty of people read the report — or read about it — and jumped to the utterly false conclusion that Obamacare would result in a “loss” of jobs.