CBO Obamacare job loss worse than reported

The Obama machine is scrambling to minimize damage inflicted by the Congressional Budget Office's report that Obamacare will have a negative impact on employment, delaying yet again parts of the employer mandate, and forcing employers to swear Orwellian oaths that they won't cut workers. But a full reading of the CBO report shows that job loss could be even worse than previously reported. 

The CBO report concludes that the equivalent of 2.5 million jobs will be lost due to Obamacare, primarily because of decisions made by workers. But, like Holmes's dog that didn't bark, the report may be even more damning because of what isn't there.

The CBO minimizes -- and even willfully ignores in some cases -- decisions that employers will make about jobs because of Obamacare provisions that punish them: penalties for not providing insurance, or insurance that doesn't carry the Obamacare stamp of approval; higher costs to provide expanded, and sometimes unnecessary, coverage; costs of maintaining and reporting Obamacare documentation, etc.

"Uncertainty in several areas -- including the timing and sequence of policy changes and implementation procedures and their effects on health insurance premiums and workers' demand for health insurance -- probably has encouraged some employers to delay hiring. However, those effects are difficult to quantify separately from other developments in the labor market, and possible effects on the demand for labor through such channels have not been incorporated into CBO's estimates of the ACA's impact." (Emphasis added.)

An omission of such importance is startling given that, as the CBO report concedes, there are multiple reasons to believe Obamacare will reduce hiring, such as the penalty paid by mid-to large-level employers who don't offer Obamacare-approved health insurance. "That penalty will initially reduce employers' demand for labor and thereby tend to lower employment."

To pay such penalties, the report reiterates, "some employers might leave wages unchanged and instead employ a smaller workforce."

Alternatively, the CBO says, "some employers will respond to the penalty by hiring fewer people at or just above the minimum wage -- an effect that would be similar to the impact of raising the minimum wage for those companies' employees."

(So much for the myth that raising the minimum wage has little effect on hiring.)

The report lays out the most logical scenario for employers facing potential penalties: "employers have an incentive, for example, to shift from hiring a single 40-hour, full-time employee to hiring two, 20-hour part-time employees to avoid bearing the costs of the penalty."

Yet, the CBO report concludes that such hiring decisions would not affect the widely-reported 2.5 million jobs figure. "In the example just offered, the total amount of work is unaffected by the changes."

Try telling that to workers who need a full-time job but only get hired part-time, due to Obamacare.

Still, the CBO argues, "there is no compelling evidence that part-time employment has increased as a result of the ACA." (Emphasis added.)

It's an artfully worded statement, dependent on the word, compelling. (More on that later.) And it depends -- in a quite Clintonian way -- on what the meaning of the word, is, is.

Could it be that there is -- meaning currently, right now, today -- little "compelling" evidence about the impact of the employer mandate on jobs because the mandate hasn't taken effect yet, and keeps getting delayed? And that, by delaying it, the Obama administration is delaying the negative impact of Obamacare on jobs -- now until after they leave office?

Further, Obamacare drops the definition of full-time employee from forty hours a week to thirty hours a week. Thus, if an employee's hours are dropped, say, from 32 hours a week to 28 to avoid Obamacare requirements, the status remains part-time. Hours are reduced, but there's no change in the rate of part-time employment.

And, apparently, the CBO doesn't find "compelling" that, as the report concedes, "the share of workers in part-time jobs has declined relatively slowly since the end of the recent recession" a period that corresponds to the passage of Obamacare. They argue that "the share of workers in part-time jobs generally declines slowly after recessions."

But what about the many reports of employers cutting workers' hours to avoid Obamacare penalties? As Jed Graham at Investor's Business Daily has documented, hundreds of organizations have either done so, or plan to do so. The IBD list, an admittedly partial one at that, can be found here.

Many of the organizations IBD has identified are public institutions: schools, colleges, and local governments. These organizations are covered by local news media, which are likely to report on such decisions as part of regular beat coverage. Most private companies are not regularly covered by media; their employment decisions are not likely to be reported. Not coincidentally, a new Obama diktat requiring firms to swear under oath that Obamacare did not limit their hiring makes public admissions all but impossible in the future.

The CBO report concedes of "anecdotal reports of firms responding to the employer penalty by limiting workers' hours," but apparently doesn't find such evidence -- hundreds of organizations cutting hours -- to be "compelling."

Then again, their hours aren't being cut.

After virtually ignoring the impact Obamacare will have on employers, the CBO report still concludes that the equivalent of 2.5 million jobs will be lost, primarily because of workers who decide to cut back on work.

The Obama propaganda machine would have us believe that's because these workers will no longer be stuck in "job lock." Obama agitprop tries to spin a tale of a workers' paradise in which these people will spend more time with family or pursue new hobbies, perhaps unaware that the future the apparatchiks describe -- of job "channels" and predictions of workers' behavior -- resonates of five-year plans and party congresses.

However, what the CBO report actually says is that these workers will decide to work less because they will be hitting income thresholds, which will mean smaller Obamacare subsidies. Simply put, the CBO concludes that these folks won't want to work more and take home less.

The CBO even admits that such an Obamacare subsidy structure "effectively raises people's marginal tax rates."

There can be little doubt that the CBO report, and the media's coverage of it, presented the negative impact that Obamacare will have on jobs in the most favorable light, focusing on voluntary reduction on hours worked and discounting -- even refusing to include -- other channels through which Obamacare will force employers to slash many more jobs.

Remember the quote, "We have to pass the bill to find out what's in it?"

Maybe we'll all learn what's in it, standing in the unemployment line.

The Obama machine is scrambling to minimize damage inflicted by the Congressional Budget Office's report that Obamacare will have a negative impact on employment, delaying yet again parts of the employer mandate, and forcing employers to swear Orwellian oaths that they won't cut workers. But a full reading of the CBO report shows that job loss could be even worse than previously reported. 

The CBO report concludes that the equivalent of 2.5 million jobs will be lost due to Obamacare, primarily because of decisions made by workers. But, like Holmes's dog that didn't bark, the report may be even more damning because of what isn't there.

The CBO minimizes -- and even willfully ignores in some cases -- decisions that employers will make about jobs because of Obamacare provisions that punish them: penalties for not providing insurance, or insurance that doesn't carry the Obamacare stamp of approval; higher costs to provide expanded, and sometimes unnecessary, coverage; costs of maintaining and reporting Obamacare documentation, etc.

"Uncertainty in several areas -- including the timing and sequence of policy changes and implementation procedures and their effects on health insurance premiums and workers' demand for health insurance -- probably has encouraged some employers to delay hiring. However, those effects are difficult to quantify separately from other developments in the labor market, and possible effects on the demand for labor through such channels have not been incorporated into CBO's estimates of the ACA's impact." (Emphasis added.)

An omission of such importance is startling given that, as the CBO report concedes, there are multiple reasons to believe Obamacare will reduce hiring, such as the penalty paid by mid-to large-level employers who don't offer Obamacare-approved health insurance. "That penalty will initially reduce employers' demand for labor and thereby tend to lower employment."

To pay such penalties, the report reiterates, "some employers might leave wages unchanged and instead employ a smaller workforce."

Alternatively, the CBO says, "some employers will respond to the penalty by hiring fewer people at or just above the minimum wage -- an effect that would be similar to the impact of raising the minimum wage for those companies' employees."

(So much for the myth that raising the minimum wage has little effect on hiring.)

The report lays out the most logical scenario for employers facing potential penalties: "employers have an incentive, for example, to shift from hiring a single 40-hour, full-time employee to hiring two, 20-hour part-time employees to avoid bearing the costs of the penalty."

Yet, the CBO report concludes that such hiring decisions would not affect the widely-reported 2.5 million jobs figure. "In the example just offered, the total amount of work is unaffected by the changes."

Try telling that to workers who need a full-time job but only get hired part-time, due to Obamacare.

Still, the CBO argues, "there is no compelling evidence that part-time employment has increased as a result of the ACA." (Emphasis added.)

It's an artfully worded statement, dependent on the word, compelling. (More on that later.) And it depends -- in a quite Clintonian way -- on what the meaning of the word, is, is.

Could it be that there is -- meaning currently, right now, today -- little "compelling" evidence about the impact of the employer mandate on jobs because the mandate hasn't taken effect yet, and keeps getting delayed? And that, by delaying it, the Obama administration is delaying the negative impact of Obamacare on jobs -- now until after they leave office?

Further, Obamacare drops the definition of full-time employee from forty hours a week to thirty hours a week. Thus, if an employee's hours are dropped, say, from 32 hours a week to 28 to avoid Obamacare requirements, the status remains part-time. Hours are reduced, but there's no change in the rate of part-time employment.

And, apparently, the CBO doesn't find "compelling" that, as the report concedes, "the share of workers in part-time jobs has declined relatively slowly since the end of the recent recession" a period that corresponds to the passage of Obamacare. They argue that "the share of workers in part-time jobs generally declines slowly after recessions."

But what about the many reports of employers cutting workers' hours to avoid Obamacare penalties? As Jed Graham at Investor's Business Daily has documented, hundreds of organizations have either done so, or plan to do so. The IBD list, an admittedly partial one at that, can be found here.

Many of the organizations IBD has identified are public institutions: schools, colleges, and local governments. These organizations are covered by local news media, which are likely to report on such decisions as part of regular beat coverage. Most private companies are not regularly covered by media; their employment decisions are not likely to be reported. Not coincidentally, a new Obama diktat requiring firms to swear under oath that Obamacare did not limit their hiring makes public admissions all but impossible in the future.

The CBO report concedes of "anecdotal reports of firms responding to the employer penalty by limiting workers' hours," but apparently doesn't find such evidence -- hundreds of organizations cutting hours -- to be "compelling."

Then again, their hours aren't being cut.

After virtually ignoring the impact Obamacare will have on employers, the CBO report still concludes that the equivalent of 2.5 million jobs will be lost, primarily because of workers who decide to cut back on work.

The Obama propaganda machine would have us believe that's because these workers will no longer be stuck in "job lock." Obama agitprop tries to spin a tale of a workers' paradise in which these people will spend more time with family or pursue new hobbies, perhaps unaware that the future the apparatchiks describe -- of job "channels" and predictions of workers' behavior -- resonates of five-year plans and party congresses.

However, what the CBO report actually says is that these workers will decide to work less because they will be hitting income thresholds, which will mean smaller Obamacare subsidies. Simply put, the CBO concludes that these folks won't want to work more and take home less.

The CBO even admits that such an Obamacare subsidy structure "effectively raises people's marginal tax rates."

There can be little doubt that the CBO report, and the media's coverage of it, presented the negative impact that Obamacare will have on jobs in the most favorable light, focusing on voluntary reduction on hours worked and discounting -- even refusing to include -- other channels through which Obamacare will force employers to slash many more jobs.

Remember the quote, "We have to pass the bill to find out what's in it?"

Maybe we'll all learn what's in it, standing in the unemployment line.

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