The health care law that makes it unaffordable to work
Kevin Glass writes at Townhall about the telling admission from the Congressional Budget Office last week about Obamacare: It will discourage some people from working.
The CBO, which is Congress’ nonpartisan accountants, tries to forecast not only federal spending but how the economy will perform. Its latest forecast was released last Wednesday. CBO repeated a prediction that it has made before: That the share of Americans “in the labor force” – working or looking for work – will not grow but will shrink.
The figure had been rising for decades, then fell dramatically during the recession. It has continued to fall, rather than bouncing back in the way it normally does during real recoveries, as Americans have given up on finding jobs. An unemployed person looking for work is considered to be in the labor force, but one who has despaired and taken a very early retirement, for example, or tries to get by on increasingly generous government benefits is no longer counted as participating in the labor force.
This is the fruit of an Obama economy marked by hostility toward economic success and business growth: The weakest recovery since World War II.
But, as Glass points out, the CBO says that even as the economy recovers, labor force participation won’t improve. The CBO’s graph:
Fewer Americans will even try finding a job, CBO says, because increasing demand for workers will run into two other forces. Read it on page 42: The most important factor is that the Baby Boom is getting old, 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.”
CBO is saying that because Obamacare gives a real subsidy that decreases as one's paycheck increases, this discourages people from earning more money. The agency was even more explicit in its forecast last February, when it said that this effect hit lower- and middle-income workers the hardest:
“For those workers, the loss of subsidies upon returning to a job with health insurance is an implicit tax on working (and is equivalent to an average tax rate of roughly 15 percent, CBO estimates). That implicit tax will cause some of those workers to lengthen the time they are out of work — similar to the effect of unemployment benefits.”
This isn’t just about the fate of workers who are discouraged out of the labor force. People who work are people who are creating wealth in the economy. If fewer people do that, we become a less prosperous country than we otherwise might have been. And that is what Obamacare is doing, according to the nonpartisan accountants at the CBO.
The Marquette University Law School poll last week found that Obamacare is still remarkably unpopular in Wisconsin – 52% of Wisconsinites dislike the law, while 38% liked it. The law, absurdly named the “Affordable Care Act,” is now more unpopular than it was last fall, during its disastrous rollout, the poll found. No wonder: Wisconsinites can see that it is not affordable and that it is going to cost most of us more than it is worth.
The CBO’s forecast says that it is going to cost all of America far more that we have so far imagined.