From a broken economy to a broken record: Friday's jobs report was the 59th straight month of private sector jobs growth, the longest stretch in U.S. history. More Americans are employed than ever.
The U.S. economy has gained 3.2 million jobs in the past twelve months — the biggest one-year jump since the Clinton administration.
Interestingly, that single-year surge overlaps with when the Affordable Care Act's major provisions, including the Medicaid expansion, took effect.
It sparked a question that I saw a few times on Twitter: Can we link the booming job market to Obamacare?
Can we lay the slur that the Affordable Care Act is a "job-killing health care law" to rest?
It's not quite that simple.
How the ACA could hurt the economy
On the one hand, the ACA is expected to have negative labor market effects: The non-partisan Congressional Budget Office predicted that the law would lead to a reduction in full-time-equivalent employment of about 2.0 million by 2017, and 2.5 million by 2024.
Of course, these are just forecasts, and the CBO has been wrong before. (For instance, the CBO used to think the ACA would lead to a reduction of 800,000 full-time equivalents. It's since revised the number up.)
Also See: Companies Are Cutting Part-Time Workers' Hours. Blame Obamacare?
But the key issue here is that Obamacare is decoupling the link between employers and health coverage. For some people, it's cutting the pressure to work, given the expansion of Medicaid and the increased ease of shopping for insurance on your own.
Is that a bad thing?
The CBO itself put a FAQ that's pretty helpful on this point. Here's a key excerpt:
Here’s a useful way to think about the choice of wording: When firms do not have enough business and decide to lay people off, the people who are laid off are generally worse off and are therefore unhappy about what is happening. As a result, other people express their sympathy to those people for having “lost their jobs” due to forces beyond their control.
In contrast, when the labor market is strong and people decide on their own to retire, to leave work to take care of their families, or to cut back on their hours to pursue other interests, those people presumably think they are better off (or they would not be making the voluntary choices they are making). As a result, other people are generally happy for them and do not describe them as having “lost their jobs.”
Regardless, it does seem clear that the ACA's negative labor market effects are starting to take hold. For instance, companies are cutting part-time hours for some workers -- and it sure seems like Obamacare is to blame.
How the ACA *might* be helping
But on the whole, the economy's clearly rebounding: Since the depth of the recession, the United States has gained more than 11 million jobs. And that growth has basically all come in full-time jobs, not part-time labor.
It's just tough to directly tie these surging jobs numbers back to the ACA. That's partly because the law's effects don't necessarily show up in the jobs report.
Harvard's David Cutler, for instance, has argued that the Affordable Care Act "reduces or eliminates many distortions" in the labor market, including the pressure of being forced to stay in a bad job simply because you need its benefits, like health insurance.
And the ACA's coverage expansion and added insurance market protections should lead to improved health for low-income workers, which could cut absenteeism and boost productivity, Cutler notes.
(It's worth noting that Cutler was an adviser to President Obama.)
If there was a direct impact of the ACA on the labor force, you'd expect to see it in the health care space. Health care's always gaining jobs, but the sector just had its best month in history: 51,200 jobs in November 2014, a new record by 12%.
Also See: Health Care Jobs Grew 50% More in 2014 Than In 2013
You can see the effect by diving into the sector, too.
Hospitals, for example, lost jobs in 2013. But in 2014, hospitals bounced back, adding about 36,000 jobs. That makes sense -- if any sector was going to reap the benefits of coverage expansion, with more insured patients, it would be hospitals.
So is the ACA truly job-killing?
Perhaps the most telling fact is this: In March 2010, the Affordable Care Act was signed into law.
The private sector hasn't lost jobs since.
—
Sign up for Dan's free newsletter.
From the archives:
