Is the ObamaCare Labor Bombshell Good News?

Pundits divided on implications of CBO report

By Matt Cantor,  Newser Staff

Posted Feb 5, 2014 1:43 PM CST

(Newser) – On the face of it, the Congressional Budget Office report saying ObamaCare could shrink the full-time workforce may sound bad—but some pundits weighing in suggest it could actually be beneficial. Here's a sampling of what they're saying:

  • To the editors of the New York Times, it's "a good thing." The report says the Affordable Care Act won't "produce an increase in unemployment (workers unable to find jobs) or underemployment (part-time workers who would prefer to work more hours per week)," they write. Instead, "the report is about the choices workers can make when they are no longer tethered to an employer because of health benefits."

  • Writing in the Los Angeles Times, Michael Hiltzik agrees: "The CBO projects that the act will reduce the supply of labor, not the availability of jobs." Indeed, "it suggests that aggregate demand for labor (that is, the number of jobs) will increase." Citing an economist, he adds that flexibility provided by ObamaCare will help "older workers with serious health conditions" who work for the purpose of benefits; it will also help young moms who might go back to work early for coverage.
  • The Wall Street Journal's editors disagree. "For low-wage, lower-skilled or discouraged workers in particular, ObamaCare offers incentives that can force them to trade jobs for entitlement benefits," they write. The CBO's report points to "an implicit tax on additional earnings"—because under the law, health subsidies disappear as one's income increases. "These effective marginal tax rates reduce the rewards for work."
  • In the Washington Post, Dana Milbank sees the report as a boost for Republicans. The White House has often trumpeted CBO findings on the health law; now, "ObamaCare has been undermined by the very entity (officials) had used to validate it." A shrinking workforce "will inevitably be a drag on economic growth, as more people decide government handouts are more attractive than working more and paying higher taxes."

President Barack Obama speaks at Buck Lodge Middle School in Adelphi, Md., Tuesday, Feb. 4, 2014.   (AP Photo/Manuel Balce Ceneta)
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