Obamacare Success – Employed Work Fewer Hours to Keep Subsidies

I call this an Obamacare success because I can’t believe that the people who designed it were unaware of this consequence.  They chose it.

Obamacare chains

We already knew that Liberals were aware of the problem because they admitted to it. They claimed that it was a good thing that we might get a shorter work week. They blamed Republicans for being harsh taskmasters, wanting us to work all the time. But their theory was that, once people no longer needed a job to get health benefits, they would be happy to take jobs with fewer hours.

That’s not quite what is happening according to the Congressional Budget Office. Kevin Glass writes at Townhall.com about he CBO’s long term economic projections.

What’s interesting is the CBO’s analysis of the makeup of the labor force. Over the next ten years, the CBO doesn’t project a return to the size of the labor force that we saw pre-2007 recession. In fact, the size of the labor force from 1984-2007 now looks to be a historical outlier…

What the CBo does write, though, is that one of the downward pressures on the labor force is Obamacare. As the report finds:

“Over the next few years, CBO expects that the rate of labor force participation will decline about 1/2 percentage point further… the most important of those factors is the ongoing movement of the baby-boom generation into retirement, but federal tax and spending policies will also tend to lower the participation rate. In particular, certain aspects of the Affordable Care Act will tend to reduce labor force participation, with the largest effect stemming from the subsidies that reduce the cost of purchasing health insurance through the exchanges. Because the subsidies decline with rising income (and increase with falling income) and make some people financially better off, they reduce the incentive for some people to work as much as they would without the subsidies.”

Glass treats this as simply a case of the government taking away some of the incentive to work. But Ramesh Ponnuru points out at the National Review that there is more going on. The government is actively discouraging and punishing work.

But CBO has never said that reducing job lock is the main way Obamacare reduces employment. It has consistently pointed out that the structure of Obamacare’s subsidies acts as an implicit tax on work, and thus causes people to work less. It’s hard to see much to cheer in that.

People lose the subsidies if they make too much money. They are effectively punished for working too much. And once people work less to get subsidies, the subsidies will mean more national debt.