During last night’s seventh Republican debate, Sen. Ted Cruz said: “… we have seen now in six years of Obamacare that it has been a disaster. It is the biggest job-killer in this country. Millions of Americans have lost their jobs, have been forced into part-time work, have lost their health insurance, have lost their doctors, have seen their premiums skyrocket.” If elected, he said, he would “repeal every word of Obamacare” – which would be a worthy goal, if Obamacare were really the job-killer Cruz claims it is. But is it?
(U.S. Senator of Texas Ted Cruz at FITN in Nashua, NH 07, by Michael Vadon – Own work. Licensed under CC BY-SA 4.0 via Wikimedia Commons)
In a word: no. Or at least, not yet, and probably not in the way Cruz means.
Prior to the rollout of the Affordable Care Act, many critics claimed that the ACA (also known as Obamacare) would impact employment. The logic was that the employer mandate, which would require all companies with more than 50 workers to extend health insurance benefits to 95 percent of their full-time workforce or pay a penalty, would result instead in employers choosing to make workers part-time or reduce positions altogether.
They had some cold, hard data to back up these claims. The Congressional Budget Office released an updated report in 2014, Labor Market Effects of the Affordable Care Act, which estimated that “the decrease in hours worked translates to a reduction in full-time-equivalent employment of about 2.0 million in 2017, rising to about 2.5 million in 2024, compared with what would have occurred in the absence of the ACA.”
The employer mandate was supposed to take effect in 2014, but was delayed until this year. So, it’s possible that we’ll start to see effects on employment in the coming years. But we certainly haven’t yet seen anything like the Obamacare-related job losses Cruz claims. Furthermore, there’s some question as to how many of any potential job losses would represent an involuntary reduction in hours.
What Does “Job-Killer” Mean, Anyway?
First of all, let’s look at the term “job-killer.” By any definition, it implies involuntary reduction in employment, whether it’s total unemployment via layoffs or underemployment through schedule cuts and resulting part-time work. But, that’s not what the CBO was predicting.
From the report:
“The reduction in full-time-equivalent employment that CBO expects will arise from the ACA includes some people choosing not to work at all and other people choosing to work fewer hours than they would have in the absence of the law; however, CBO has not tried to quantify those two components of the overall effect. Because some people will reduce the amount of hours they work rather than stopping work altogether, the number who will choose to leave employment because of the ACA in 2024 is likely to be substantially less than 2.5 million.”
In other words, that 2.5 million includes voluntary part-time employment, from people who would otherwise be forced to work full-time for benefits.
So, Where Does Cruz’s Number Come From?
It comes from wherever politicians get dubious claims. Bottom line, it has no relationship to reality.
“It’s unclear how Cruz’s claim could be true when data from the U.S. Department of Labor shows that the U.S. has added 9 million jobs since the Affordable Care Act was passed in 2009,” writes Mark Sullivan at Fast Company. “Cruz asserts that Obamacare has driven many into part-time work. But Department of Labor stats show that the number of people working part-time jobs has been on the decline.”
The first open enrollment period for Obamacare began Jan. 1, 2014. If the ACA itself were a job-killer, we should have seen the impact by now. Instead, in 2015 as a whole, the number of involuntary part-time workers declined by 764,000, according to the Bureau of Labor Statistics, while the number of long-term unemployed decreased by 687,000, and the number of workers marginally attached to the labor force declined by 427,000. The unemployment rate, which includes workers who are eligible for and receive unemployment insurance benefits, has held steady 5 percent for several months.
Obamacare is far from perfect, but it’s not the biggest job-killer in the country.
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