The Wall Street Journal editorial board, which one would assume is pretty experienced in understanding numbers, went with an interpretation of new Congressional Budget Office data that suggests, incorrectly, that Obamacare is a job-killer. Of course, its job is opinion, not data analysis.
We looked at the data under consideration on Tuesday. In short, the CBO's review of the budget and economy over the next decade suggested that the Affordable Care Act would mean a decline in annual hours worked to the tune of 2.5 million full-time equivalent employees (FTE) in 2024. Not 2.5 million jobs, mind you — a number of hours equivalent to 2.5 million full years worth of employment. So, put another way, Americans will work about 5.2 billion fewer hours by 2024 (assuming 2,080 hours a year per FTE) as a result of Obamacare.
As a number of places pointed out on Tuesday afternoon — including The Washington Post and Talking Points Memo — the "Obamacare will kill 2.5 million jobs" line which quickly cropped up was too irresistible for opponents of the policy to resist. Perhaps the worst analysis came from Politico, which wrote, "There’s a lot more fine print about what those numbers really mean, and whether the jobs were 'lost.' … But what matters politically is how the numbers look in attack ads. And in this election year, '2 million lost jobs' is a Republican ad-maker’s dream."
The Journal editorial board seems to have similarly considered the figure a dream come true. "The Jobless Care Act," it titled its assessment. The body of the article notes the 2.5 million FTE number, and speculates that the employer mandate, not addressed by the CBO, means it is "underestimating job losses." Its conclusion is unabashed: "[N]ow we learn that the law is a job destroyer that is removing rungs from the ladder of upward economic mobility."
Well, no, that's not what we learned. As the CBO is careful to note, the 2.5 million FTE reduction "stems almost entirely" from employees who are choosing not to work the same hours or at the same jobs. At the rival New York Times, the editorial board took the more generous approach to that data. The report shows that "many workers who felt obliged to stay in a job that provided health benefits would now be able to leave those jobs or choose to work fewer hours than they otherwise would have," it wrote. "In other words, the report is about the choices workers can make when they are no longer tethered to an employer because of health benefits."
The Journal, indulging in its predictions about the employer mandate and appealing to "common sense," instead sees that it will "raise hiring costs and induce businesses to hire less, or pay lower wages, or slash hours, or all three." As even Republican Rep. Paul Ryan pointed out in a hearing Wednesday morning, the CBO doesn't project job losses due to layoffs. Business Insider's Josh Barro noted that employee flexibility could actually mean more competition among employers to keep workers, leading to increased wages.
Business owners hate Obamacare. Obamacare strengthens workers' hands in bargaining. This is not a coincidence. http://t.co/ShLSmYgZWm— Josh Barro (@jbarro) February 4, 2014
"Health reform isn’t an intervention in a previously undistorted economy," the (liberal) economist Paul Krugman writes about the CBO report. "you might say that it replaces one set of distortions with a different set of distortions." The distortion's shift under Obamacare is to the benefit of employee flexibility and low-wage and no-wage workers.
What the Journal sees as "removing rungs" of upward mobility thanks to concerns about losing subsidies for health insurance, employees may see as having the flexibility to stop always trying to scramble upward. What the Journal sees as "offering an in-kind bonus for unemployment," the already-unemployed would consider a critical safety net.
Those distinctions arise because the Journal doesn't like the shift away from employers and to employee flexibility. "Jobless Care Act" sounds like something from one of those Republican ad-makers, and that's not a coincidence.