Straight from the CBO’s mouth about ACA and job loss
By Dian Vujovich
No matter what you think of the Affordable Care Act, the mere mention of it ignites fiery responses. Most recently the hoopla has been about the likely number of jobs that will be lost in the coming years because of this health care law.
Losing a job is typically never a good thing for the individual who has been axed or labor market reports. So it’s not unusual that a recent Congressional Budget Office (CBO) report about that subject got talking heads seriously yapping.
Before clearing the air with words straight from the horse’s mouth, two things to keep in mind are that the CBOs estimates are just that—estimates. Nothing carved in granite here.
The second thing is we’re talking what could happen three to 10 years from now. Really? We all know that hitting the bull’s eye on future figuring isn’t an exact science. All of which means, why argue about a shifting sands future when knowing what tomorrow will bring is as much of a surprise on Wall Street as is what’s going on within our economy?
To come as close as possible to setting the facts straight and quelling the controversy surrounding the possibility of job loss and health care, here are two questions the CBO addressed in their report titled ” Frequently Asked Questions About CBO’s Estimates of the Labor Market Effects of the Affordable Care Act” and bits of their answers:
Q: Will 2.5 Million People Lose Their Jobs in 2024 Because of the ACA?
A: “No, we would not describe our estimates in that way.
We wrote in the report: “CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor.” The reason for the reduction in the supply of labor is that the provisions of the ACA reduce the incentive to work for certain subsets of the population…..Therefore, some people will decide not to work or to work fewer hours than would otherwise be the case—including some people who will choose to retire earlier than they would have otherwise, and some people who will work less themselves and rely more on a spouse’s earnings……Because the longer-term reduction in work is expected to come almost entirely from a decline in the amount of labor that workers choose to supply in response to the changes in their incentives, we do not think it is accurate to say that the reduction stems from people “losing” their jobs….”
Q: Why Did CBO Revise its Estimates of the Labor Market Effects of the ACA?
A: “The baseline economic and budgetary projections developed by CBO incorporate our estimates of the future effects of fiscal policies under current law. We update our budget and economic projections regularly to account for new information and analysis regarding federal fiscal policies and many other influences on the economy and the budget…… In producing this year’s projections, one area on which we focused was the labor market, in light of both its importance and the slow growth of employment during the past several years. One aspect of that intensive examination of the labor market was a review of our previous analysis of the effects of the ACA…… As a result of that new analysis, we concluded that our earlier estimate had been too small…”
Q: Are You Sure That CBO’s Current Estimates of the Labor Market Effects of the ACA Are Accurate?
A: “No, we are not sure that our current estimates are accurate, because our estimates are always uncertain….”
Read the CBO’s full report at : http://tinyurl.com/mel4hak .
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