An Illinois congressman is currently running campaign ads saying that if he’s re-elected he will work to repeal Obamacare, because it it costing Americans jobs. But how can this be true? We still need doctors and other healthcare professionals, obviously. The actual insurance is handled by existing private firms, so no loss there. In fact, if more people end up being insured, wouldn’t that mean more jobs, not fewer?
This is in GQ because I’m not interested in debating the merits or failings of what some call Obamacare. I’m just curious about this claim of job loss. It may be inevitable that the thread will get moved, but for now, just the facts please.
A real universal, single-payer system would certainly eliminate a lot of jobs because it would massively cut down on the needed bureaucracy. Perhaps that is what he is thinking of. If America’s debate over healthcare were at all rational and reality based, this would be an issue, but of course, as things are, that is cloud-cuckoo land. I do not see how Obamacare as actually constituted is going to cost any jobs.
I would hazard a guess that the congressman is repeating the recent claims of the U.S. Chamber of Commerce, which was rated by PolitiFact as false. The main argument for job loss appears to be that if employers have to provide good health insurance to everyone, it’ll cost them more, and therefore they’ll be less prone to hire new workers. However, according to PolitiFact, the papers & studies used to support this claim don’t really prove this.
Someone is going to have to set up and maintain all those state-level insurance exchanges - it seems to me that those would create additional jobs right there.
The new healthcare law requires companies with more than 50 employees to offer them health insurance cover, and it requires that cover to provide a certain minimum standard of care. That means that some large companies who currently offer no health insurance, or insurance with very poor coverage, will face extra costs as they have to adapt. However the CBO’s study and other studies found that the effect on jobs will be negligible. As you point out, the healthcare law will also increase jobs in certain ways, although again the effect overall will be insignificant.
The CBO did find that the healthcare law will reduce jobs in the US by about 0.5% net, but that’s for a different reason: it’s because they found that a lot of people are currently working purely to keep their health insurance. They would rather quit their job and start up their own company, or become a housewife, or write a novel, but they can’t because they would lose their health insurance. The new healthcare law means that people in that situation could quit their job and still be guaranteed health insurance, so the CBO estimates those people will finally leave their jobs, by choice.
The bottom line is the “job-killing” claim is not true.
I’m not even sure this is true. There seem to be an awful lot of people working for the VA health system (which is as close to government sponsored single-payer system as we have at the moment.) I haven’t seen any evidence that there are fewer than a private hospital - in fact the VA seems to be staffed with more superfluous people, to be honest.
But the law applies to all companies in all states, right? So if the costs rise for everybody, sure it sucks, but it’s not a disadvantage. They still have to hire people to do the work, and since it hits all, everybody might raise the prices.
When gas prices rose, it affected a lot of industry that in any way had materials delivered to them because delivery became more expensive. So all companies in those areas raised their prices slightly. (Other businesses that didn’t required as much delivery - say a tax advisor or IT consulting vs. car production or supermarket - didn’t).
So this law would be more equal than random forces of business or nature.
Well… if you’re a small manufacturer and you’re debating whether to stick with a manual workforce, to outsource the work to China, or to invest $10 million in assembly line upgrades… Added health care costs will favor China and robots.
And if you deliver pizza, an increase to the cost of the product might convince some people to eat more frozen pizza (which can, of course, be assembled by robots or Chinese).
All that said, I don’t see anyone doing a serious analysis who concludes that significant numbers of jobs will be lost. As you say, some will be hurt more than others, but the net effect won’t be that big of a deal. The only people making the claim about job loss seem to be going with a knee-jerk reaction.
The long and the short is that single payer systems don’t have to spend millions on people who verify eligibility, coverage and so on. Private insurers and providers and the VA do; they have to establish coverage, which is relatively painless, but also whether someone else should be the primary payor.
Employers also have to pay lots of people (or third parties) to administer their own health plans.
Also, in a public health system like Canada’s- every doctor, evry hospital knows which procedures are covered and what are the criteria, since they are the same for every patient, every doctor; administration is so much simpler - is the patient a resident of the province, yes or no? The doctor submits under his health number; either he’s covered or not. The doctor’s office simply fills in the forms, no dozens of form for different plans, etc. No chasing patients for payment, no back and forth arguing about eligibility of paitient or procedure…
Studies, like statistics, can be tortured (or waterboarded) to tell you what you want to hear. Politicains with an agenda can then select the desired study to assert whatever they choose.
A job so precarious that increased health costs will eliminate it is likely precarious for other reasons and likely to dissapear soon anyway.
What about the OP’s point that since the law will give insurance companies millions of new customers, they’ll have to hire lots more people to handle all the extra business? Won’t it be more likely to result in a net increase in jobs?
(Not that I personally think increasing the bureaucracy at insurance companies is a great thing.)
It will give insurance companies millions of new covered lives. The administrative costs for all those extra people will be covered by their employers, either by in-house human resource personnel or third party administrators.
Most of the administrative costs for the unemployed and employees of small businesses will fall on states, as most of those people will end up purchasing insurance through the state exchanges.
So, jobs will be created, but the majority will not be within insurance carriers.
I don’t know about Obamacare, but it strikes me as delusional to believe that instituting single-payer (government) health care in the U.S. will cut jobs. There’d be huge bureaucratic expansion, necessitating hiring of many more people to run and oversee the system, limit fraud, determine permissible treatments and payments, deal with all the groups lobbying for coverage for their particular illness/purported illness/alternative therapies, mandate and overhaul electronic record-keeping systems, and on and on.
Mild hijack, but did you see the N.Y. Times editorial claiming that new EPA rules vastly limiting power plant pollutants would create a bunch of jobs? True, you’d probably need to hire people to retrofit existing plants. Dunno about all those plants that’d have to close and lay off workers…
This is a false argument. Most manufacturing jobs have either been outsourced to China long ago, or they won’t be because there’s a good reason to keep them here: they already were outsourced and quality found to be better with trained apprentices than with illiterate cheap workers; the operation is too small to be outsourceable; the knowledge shouldn’t be available to the Chinese to copy (they have bought whole factories and not bothered to dismantle them because they only were interested in the blueprints; and many companies who have outsourced complain about the increase in pirate-copies).
Again, this is curiously never brought up when some other part of the market influences costs, like gasoline prices. What about the cost for small business that want to market their products across the state border and need experts for the different laws in other states, or sometimes new licenses, because everything is regulated locally?
You would need some hard serious cite by respectable scientists (not economists, but psychologists, sociologists, and marketing experts) on what influences the decision to buy fresh pizza vs. frozen pizza. Fresh pizza is already 5-10$ depending on location, frozen pizza can be had for 1.50 about. Yet people still prefer to order fresh instead of frozen. Obviously other factors are at play.
A much factor would be the increase in gas prices leading to higher prices for home delivery. Has anybody suggested the impact on this?
You seem to be debating the premise that Obamacare is the only thing that eliminates jobs. Not even the craziest of the crazy Republicans has made that assertion.
On the contrary, single payer health care would result in an ENORMOUS bureaucratic contraction. As **Really Not All That Bright **already posted in this thread:
You can’t count the inevitable government expansion and completely ignore the much much larger elimination of wasteful private bureaucracy in the form of private insurers.
I don’t get this. You accurately summarized what was in the link, but people leaving the job market does not eliminate jobs, especially in a time of labor surplus. These people would not be counted as unemployed, and their jobs would be backfilled by the unemployed. The guy starting his own company would create a net increase in the number of jobs, and the housewife would cause a decrease in the unemployment rate by leaving the labor force. So, all good.
And the large number of people employed in medical offices dealing with the insurers. Basically we’d eliminate a lot of people whose job it is to break windows.
People tend to reduce spending on something if it costs more (in general). So, make hiring a person cost more and people will tend to hire fewer people.
Increasing government spending requires that money be taken out of the economy as taxes, which means less to invest and grow the economy’s, which means fewer jobs.
Sure politifact and others can quibble with the finer points, but those two simple principles are all that is necessary to show that obamacare will tend to increase permanent unemployment.