“Obamacare Won’t Cause Society To Collapse”: Americans Choosing To Work Less Doesn’t Mean They’re Losing Their Jobs

A small war has erupted over the recent Congressional Budget Office report on the employment effects of the Affordable Care Act. Last week, the CBO itself felt compelled to offer a lengthy and detailed rebuttal to the spin that millions of Americans will “lose their jobs” as a result of Obamacare.

So let’s first be clear about what the CBO report concluded: As a result of the ACA, millions of Americans will choose to work less, if at all. That doesn’t mean that they will “lose their jobs.” Rather, it means that many will choose to give up working double-shifts just so they can make enough to afford health insurance or leave jobs they hate but have kept simply because they can’t maintain their coverage otherwise. In virtually all cases, these are decisions people are making for themselves and presumably welcome. As the CBO points out, as opposed to “losing their jobs,” in which case we’d all feel sad for them, friends and neighbors will invariably feel happy for these individuals.

But, of course, not everyone. To conservatives, the CBO report demonstrates what they have said about Obamacare – and about the government dole generally – all along: It creates “perverse incentives” encouraging people not to work.

The conservative argument is based on several underlying assumptions, like a DirecTV ad: When you give things to people, they work less. When they work less, they’re worse off. When they’re worse off, they demand more. When they demand more, liberals give them more. And when liberals give them more, society collapses. Don’t have society collapse: Stop the Affordable Care Act.

Of course, the CBO report did in fact find that providing this health coverage will induce millions of people to work less or not at all. So let’s look a little more closely at this syllogism.

It’s undoubtedly true that if you give things to some people, they’ll work less. But it’s not true in all cases. Unfortunately, this sort of assertion is a staple of anti-government rhetoric: For any government expenditure, it can be shown to have enriched some deadbeat or rip-off artist. But so has the derivatives market. Meanwhile, plenty of people work more when you give them more.

In fact, most conservative policies these days are based on the idea that certain people need to be given more to induce them to work harder and to produce more. Of course, those highly-sensitive individuals are the rich and corporate executives, who, without more money (including from the government) simply wouldn’t keep working and creating. By the same logic, though, we should extend even more benefits to more working people – perhaps even raise wages at the low end – to encourage them to work. But for some reason low-income Americans, unlike the wealthy, are presumed to work best if we take incentives and benefits away from them.

Moreover, as the CBO pointed out, there is indeed a “perverse” work disincentive in Obamacare – but it’s the opposite of what conservatives have taken the report to say. Rather, it’s that, as people’s incomes rise, they get less support – a “tax,” in effect, on work. And, of course, taxes are bad. So we actually should be less stingy about giving even better health care benefits to even more people.

Of course, we’d need to pay for those expanded benefits, which appears to be the real point of the “collapse of our culture” argument – not so much that people won’t work as that people who do work will wind up having to support them. But there’s then an obvious way to pay for these benefits if you want to encourage work: tax unearned income (which accrues, by definition, to nonworkers) at a higher rate than we tax earned income. And if giving people money or benefits for which they didn’t have to work encourages sloth, then we’d best start taxing away all inheritance post-haste, as well.

We don’t, of course, because that would tax primarily the rich. But most parents want to leave something behind for their children, because we know that getting a leg up is usually the way to climb even higher. Few people throw their kids out of the house with no means of support, on the grounds that that will make them more successful. Nevertheless, many argue that helping other people’s children only cripples them as opposed to, well, helping them.

It is incumbent upon liberals to assert not just that children “deserve” health care or that people “shouldn’t have to” work grueling hours and still not make ends meet. Such assertions are, after all, merely subjective. But if investments in human capital actually improve total productivity, then the only argument against is that “the poor you always have with you” actually is a commandment, not a condemnation. And various studies (such as this and this) have shown – not surprisingly – that health care is one of the better bets for boosting productivity and workforce engagement.

And productivity, after all, is really the issue. No one longs for the days when people had to toil every waking moment to scrape out subsistence livings, instead of a modern world where a 40-hour work week can enable one to produce more economic value than the greatest medieval monarchs could even dream of. So do we really think it’s good if more and more Americans feel compelled to work 80 hours a week just to make ends meet? Would it mean our economy, or our morals, were headed downhill if more Americans decided they didn’t need to work two shifts every day but could get by, having all they want, on only one?

In short, it isn’t clear that more work is self-evidently good. Or that society will collapse if people work a little less – let alone if it makes them more productive overall – because they have health care. Just as it didn’t collapse when we moved to a 40-hour workweek and ended child labor. But it’s possible. After all, when I can’t get cable, I do get angry.

By: Eric B. Schnurer, U. S. News and World Report, February 22, 2014