“Health, Work, Lies”: Losing Your Job And Choosing To Work Less Aren’t The Same Thing
On Wednesday, Douglas Elmendorf, the director of the nonpartisan Congressional Budget Office, said the obvious: losing your job and choosing to work less aren’t the same thing. If you lose your job, you suffer immense personal and financial hardship. If, on the other hand, you choose to work less and spend more time with your family, “we don’t sympathize. We say congratulations.”
And now you know everything you need to know about the latest falsehood in the ever-mendacious campaign against health reform.
Let’s back up. On Tuesday, the budget office released a report on the fiscal and economic outlook that included two appendices devoted to effects of the Affordable Care Act.
The first appendix attracted almost no attention from the news media, yet it was actually a bombshell. Much public discussion of health reform is still colored by Obamacare’s terrible start, and presumes that the program remains a disaster. Some of us have pointed out that things have been going much better lately — but now it’s more or less official. The budget office predicts that first-year sign-ups in the health exchanges will fall only modestly short of expectations, and that nearly as many uninsured Americans will gain insurance as it predicted last spring.
This good news got drowned out, however, by false claims about the meaning of the second health care appendix, on labor supply.
It has always been clear that health reform will induce some Americans to work less. Some people will, for example, retire earlier because they no longer need to keep working to keep their health insurance. Others will reduce their hours to spend more time with their children because insurance is no longer contingent on holding a full-time job. More subtly, the incentive to work will be somewhat reduced by health insurance subsidies that fall as your income rises.
The budget office has now increased its estimate of the size of these effects. It believes that health reform will reduce the number of hours worked in the economy by between 1.5 percent and 2 percent, which it unhelpfully noted “represents a decline in the number of full-time-equivalent workers of about 2.0 million.”
Why was this unhelpful? Because politicians and, I’m sorry to say, all too many news organizations immediately seized on the 2 million number and utterly misrepresented its meaning. For example, Representative Eric Cantor, the House majority leader, quickly posted this on his Twitter account: “Under Obamacare, millions of hardworking Americans will lose their jobs and those who keep them will see their hours and wages reduced.”
Not a word of this claim was true. The budget office report didn’t say that people will lose their jobs. It declared explicitly that the predicted fall in hours worked will come “almost entirely because workers will choose to supply less labor” (emphasis added). And as we’ve already seen, Mr. Elmendorf did his best the next day to explain that voluntary reductions in work hours are nothing like involuntary job loss. Oh, and because labor supply will be reduced, wages will go up, not down.
We should add that the budget office believes that health reform will actually reduce unemployment over the next few years.
Just to be clear, the predicted long-run fall in working hours isn’t entirely a good thing. Workers who choose to spend more time with their families will gain, but they’ll also impose some burden on the rest of society, for example, by paying less in payroll and income taxes. So there is some cost to Obamacare over and above the insurance subsidies. Any attempt to do the math, however, suggests that we’re talking about fairly minor costs, not the “devastating effects” Mr. Cantor asserted in his next post on Twitter.
So was Mr. Cantor being dishonest? Or was he just ignorant of the policy basics and unwilling to actually read the report before trumpeting his misrepresentation of what it said? It doesn’t matter — because even if it was ignorance, it was willful ignorance. Remember, the campaign against health reform has, at every stage, grabbed hold of any and every argument it could find against insuring the uninsured, with truth and logic never entering into the matter.
Think about it. We had the nonexistent death panels. We had false claims that the Affordable Care Act will cause the deficit to balloon. We had supposed horror stories about ordinary Americans facing huge rate increases, stories that collapsed under scrutiny. And now we have a fairly innocuous technical estimate misrepresented as a tale of massive economic damage.
Meanwhile, the reality is that American health reform — flawed and incomplete though it is — is making steady progress. No, millions of Americans won’t lose their jobs, but tens of millions will gain the security of knowing that they can get and afford the health care they need.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 6, 2014
“Willful Stupidity In The Obamacare Debate”: Fat Chance, Republicans Are Not Looking For Enlightenment
One of the best arguments for health-insurance reform is that our traditional employer-based system often locked people into jobs they wanted to leave but couldn’t because they feared they wouldn’t be able to get affordable coverage elsewhere.
This worry was pronounced for people with preexisting conditions, but it was not limited to them. Consider families with young children in which one parent would like to get out of the formal labor market for a while to take care of the kids. In the old system, the choices of such couples were constrained if only one of the two received employer-provided family coverage.
Or ponder the fate of a 64-year-old with a condition that leaves her in great pain. She has the savings to retire but can’t exercise this option until she is eligible for Medicare. Is it a good thing to force her to stay in her job? Is it bad to open her job to someone else?
By broadening access to health insurance, the Affordable Care Act (ACA) ends the tyranny of “job lock,” which is what the much-misrepresented Congressional Budget Office (CBO) study of the law released Tuesday shows. The new law increases both personal autonomy and market rationality by ending the distortions in behavior the old arrangements were creating.
But that’s not how the study has been interpreted, particularly by enemies of the law. Typical was a tweet from the National Republican Congressional Committee, declaring that “#ObamaCare is hurting the economy, will cost 2.5 millions [sic] jobs.”
Glenn Kessler, The Post’s intrepid fact checker, replied firmly: “No, CBO did not say Obamacare will kill 2 million jobs.” What the report said, as the Wall Street Journal accurately summarized it, is that the law “will reduce the total number of hours Americans work by the equivalent of 2.3 million full-time jobs.”
Oh my God, say opponents of the ACA, here is the government encouraging sloth! That’s true only if you wish to take away the choices the law gives that 64-year-old or to those parents looking for more time to care for their children. Many on the right love family values until they are taken seriously enough to involve giving parents/workers more control over their lives.
And it’s sometimes an economic benefit when some share of the labor force reduces hours or stops working altogether. At a time of elevated unemployment, others will take their place. The CBO was careful to underscore — the CBO is always careful — that “if some people seek to work less, other applicants will be readily available to fill those positions and the overall effect on employment will be muted.”
The CBO did point to an inevitable problem in how the ACA’s subsidies for buying health insurance operate. As your income rises, your subsidy goes down and eventually disappears. This is, as the CBO notes, a kind of “tax.” The report says that if the “subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work.”
But the answer to this is either to make the law’s subsidies more generous — which the ACA’s detractors would oppose because, as the CBO suggests, doing so would cost more than the current law — or to guarantee everyone health insurance, single-payer style, so there would be no “phaseout” and no “marginal tax rates.” I could go with this, but I doubt many of the ACA’s critics would.
The rest of the CBO report contained much good news for Obamacare: Insurance premiums under the law are 15 percent lower than originally forecast, “the slowdown in Medicare cost growth” is “broad and persistent” and enrollments will catch up over time to where they would have been absent Obamacare’s troubled rollout.
The reaction to the CBO study is an example of how willfully stupid — there’s no other word — the debate over Obamacare has become. Opponents don’t look to a painstaking analysis for enlightenment. They twist its findings and turn them into dishonest slogans. Too often, the media go along by highlighting the study’s political impact rather than focusing on what it actually says. My bet is that citizens are smarter than this. They will ignore the noise and judge Obamacare by how it works.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, February 5, 2014
“Thanks For Nothing Republicans”: Unemployment Benefits, The Cruelest Cut Of All
To 1.3 million jobless Americans: The Republican Party wishes you a Very Unhappy New Year!
It would be one thing if there were a logical reason to cut off unemployment benefits for those who have been out of work the longest. But no such rationale exists. On both economic and moral grounds, extending benefits for the long-term unemployed should have received an automatic, bipartisan vote in both houses of Congress.
It didn’t. Nothing is automatic and bipartisan anymore, not with today’s radicalized GOP on the scene. In this case, a sensible and humane policy option is hostage to bruised Republican egos and the ideological myth of “makers” vs. “takers.”
The result is a cruel blow to families that are already suffering. On Saturday, benefits were allowed to expire for 1.3 million people who have been unemployed more than six months. These are precisely the jobless who will suffer most from a cutoff, since they have been scraping by on unemployment checks for so long that their financial situations are already precarious, if not dire.
Extending unemployment benefits is something that’s normally done in a recession, and Republicans correctly point out that we are now in a recovery. But there was nothing normal about the Great Recession, and there is nothing normal about the Not-So-Great Recovery.
We are emerging from the worst economic slump since the Depression, and growth has been unusually — and painfully — slow. Only in the past few months has the economy shown real signs of life. Job growth is improving but still sluggish, with unemployment hovering at 7 percent — not counting the millions of Americans who have given up looking for work.
An extension of long-term unemployment benefits should have been part of the budget deal between Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) but wasn’t. Democrats tried to offer an amendment that would extend the benefits for three months, and they identified savings elsewhere in the budget to pay for it. But House Speaker John Boehner refused to allow a vote on the proposal.
In terms of economic policy, this makes no sense. The nonpartisan Congressional Budget Office estimated that extending long-term unemployment for a full year would cost about $25 billion, which would add to the deficit. But the measure would boost economic growth by two-tenths of 1 percent and create 200,000 jobs. Given that interest rates are at historical lows, and given that the imperative right now is to create growth and jobs, refusing to extend the benefits is counterproductive as well as cruel.
Sadly, cruelty is the point.
The Republican far right perceived the budget deal as a political defeat — even though it caps spending for social programs at levels that many Democrats consider appallingly low — because it does not slash Medicare and Social Security. For some in the GOP, accepting an unemployment extension would have been too much to swallow, simply because it was favored by Democrats.
For some other Republicans, unemployment isn’t really about spending, growth, deficits or even politics. They see it as a moral issue.
To this way of thinking, extended benefits coddle the unemployed and encourage them to loll around the house, presumably eating bonbons, rather than pound the streets for any crumbs of work they can find, however meager.
This view is consistent with the philosophy that Mitt Romney privately espoused during his failed presidential campaign. It sees a growing number of Americans as parasitic takers who luxuriate in their dependence on government benefits — 47 percent was the figure Romney came up with. The makers who create the nation’s wealth are not really helping the down-and-out by giving them financial support to make it through tough times, this philosophy holds. Much better medicine would be a kick in the pants.
I wonder if these Ayn Rand ideologues have ever actually met a breadwinner who has gone without a job for more than six months. I wonder if they know that some jobless men and women — and I know this is hard to believe — don’t have well-to-do parents or even a trust fund to fall back on. I wonder if they understand that unemployment benefits don’t even cover basic expenses, much less bonbons.
The Republican establishment doesn’t want this to be a campaign issue for Democrats, so it’s quite likely that the benefits will eventually be extended. Until then, more than 1 million households are being made to suffer privation and anxiety — for no good reason at all. Thanks for nothing, GOP.
By: Eugene Robinson, Opinion Writer, The Washington Post, December 30, 2013
“The Fear Economy”: The Economy May Be Lousy For Workers, But Corporate America Is Doing Just Fine
More than a million unemployed Americans are about to get the cruelest of Christmas “gifts.” They’re about to have their unemployment benefits cut off. You see, Republicans in Congress insist that if you haven’t found a job after months of searching, it must be because you aren’t trying hard enough. So you need an extra incentive in the form of sheer desperation.
As a result, the plight of the unemployed, already terrible, is about to get even worse. Obviously those who have jobs are much better off. Yet the continuing weakness of the labor market takes a toll on them, too. So let’s talk a bit about the plight of the employed.
Some people would have you believe that employment relations are just like any other market transaction; workers have something to sell, employers want to buy what they offer, and they simply make a deal. But anyone who has ever held a job in the real world — or, for that matter, seen a Dilbert cartoon — knows that it’s not like that.
The fact is that employment generally involves a power relationship: you have a boss, who tells you what to do, and if you refuse, you may be fired. This doesn’t have to be a bad thing. If employers value their workers, they won’t make unreasonable demands. But it’s not a simple transaction. There’s a country music classic titled “Take This Job and Shove It.” There isn’t and won’t be a song titled “Take This Consumer Durable and Shove It.”
So employment is a power relationship, and high unemployment has greatly weakened workers’ already weak position in that relationship.
We can actually quantify that weakness by looking at the quits rate — the percentage of workers voluntarily leaving their jobs (as opposed to being fired) each month. Obviously, there are many reasons a worker might want to leave his or her job. Quitting is, however, a risk; unless a worker already has a new job lined up, he or she doesn’t know how long will it take to find a new job, and how that job will compare with the old one.
And the risk of quitting is much greater when unemployment is high, and there are many more people seeking jobs than there are job openings. As a result, you would expect to see the quits rate rise during booms, fall during slumps — and, indeed, it does. Quits plunged during the 2007-9 recession, and they have only partially rebounded, reflecting the weakness and inadequacy of our economic recovery.
Now think about what this means for workers’ bargaining power. When the economy is strong, workers are empowered. They can leave if they’re unhappy with the way they’re being treated and know that they can quickly find a new job if they are let go. When the economy is weak, however, workers have a very weak hand, and employers are in a position to work them harder, pay them less, or both.
Is there any evidence that this is happening? And how. The economic recovery has, as I said, been weak and inadequate, but all the burden of that weakness is being borne by workers. Corporate profits plunged during the financial crisis, but quickly bounced back, and they continued to soar. Indeed, at this point, after-tax profits are more than 60 percent higher than they were in 2007, before the recession began. We don’t know how much of this profit surge can be explained by the fear factor — the ability to squeeze workers who know that they have no place to go. But it must be at least part of the explanation. In fact, it’s possible (although by no means certain) that corporate interests are actually doing better in a somewhat depressed economy than they would if we had full employment.
What’s more, I don’t think it’s too much of a stretch to suggest that this reality helps explain why our political system has turned its backs on the unemployed. No, I don’t believe that there’s a secret cabal of C.E.O.’s plotting to keep the economy weak. But I do think that a major reason why reducing unemployment isn’t a political priority is that the economy may be lousy for workers, but corporate America is doing just fine.
And once you understand this, you also understand why it’s so important to change those priorities.
There’s been a somewhat strange debate among progressives lately, with some arguing that populism and condemnations of inequality are a diversion, that full employment should instead be the top priority. As some leading progressive economists have pointed out, however, full employment is itself a populist issue: weak labor markets are a main reason workers are losing ground, and the excessive power of corporations and the wealthy is a main reason we aren’t doing anything about jobs.
Too many Americans currently live in a climate of economic fear. There are many steps that we can take to end that state of affairs, but the most important is to put jobs back on the agenda.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 26, 2013
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