TPM spoke with... top economists who agreed with [this] analysis: People choosing to work less because of Obamacare, as CBO projects, would mean higher wages.Supply and demand: reality's greatest defender -- at least, in matters economic.
"That stands to reason. You get this sorting effect," Dean Baker, co-founder of the left-leaning Center for Economic and Policy Research. "You have a lot of people working now who don't want to work. The only way they can get insurance is through their employer."
Those people retire or cut back their hours or otherwise lower their participation in the labor market -- a possibility that CBO raised itself -- reducing the labor supply. Over the long term, that drives up wages. Baker said that CBO said as much in its analysis: The report projected that total hours worked would drop by as much as 2 percent by 2024 because of Obamacare, but total compensation would fall only 1 percent.
It's a pretty simple concept; if American workers work fewer hours, that doesn't mean that the workload they used to carry no longer needs to get done. As the supply of work hours drops, the demand automatically rises. When demand for labor rises, wages rise. Workers can demand more to work the same hours -- although in reality this will probably manifest as employer-designed incentive programs to keep employees at the workplace longer. Workers won't have to actually make that demand, because employers will beat them to the punch with the offer.
This has always been at the heart of Republican fearmongering over Obamacare. Before, many employees were trapped in jobs they didn't like or were working more hours than they preferred, because leaving or cutting back would mean losing their necessary health insurance. If insurance is no longer contingent on full-time employment, workers are free to pursue other interests, create more family-friendly work schedules, cut back to part time as the get closer to retirement, or even retire earlier. Employers do not like this and the big corporations who make up the GOP's funding base are big employers.
The ironic thing is that this all plays to the sort of things that Republicans are always talking about. It's not hard to foresee an increase in entrepreneurship, as employees leave companies or cut back hours to pursue their dreams. We'll probably see growth in self-employed or partially self-employed workers. American workers will be able to be more independent, more self-reliant, more able to take the risks required to start up a small business.
But of course when Republicans talk about this stuff, it's all happy horsecrap. It's a sales pitch, not an aspiration. If you still need proof of that, I don't know what to tell you. Why do they want to repeal a law that will increase entrepreneurship -- oh, and decreases the deficit at the same time? You think the big businesses the GOP represents wants a whole bunch of small businesses popping up and competing with them?
When the CBO report came out yesterday, the initial reporting on it was terrible -- journalistic malpractice, pure and simple. But the earlier crap reporting by the mainstream press is being corrected, while the more partisan media outlets never get it right anyway. If you watch Fox News, you want to be lied to and you'll hate Obamacare no matter what. And of course, reality will do some heavy lifting when 2 million jobs fail to evaporate and employees' compensation begins to rise.
That's the problem with spin -- eventually, it'll be proven wrong. Especially when it's based on a deliberate misunderstanding of the facts.
-Wisco
[photo by LaDawna Howard]
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