The Affordable Care Act could lead to a reduction in the number of full-time American workers by as many as 2 million, according to a Tuesday report from the Congressional Budget Office.
By the year 2021, the report states, the nation could see a large reduction in overall working hours, equivalent to losing some 2.3 million full-time workers. As low-earning Americans take advantages of increased subsidies for health insurance, the report says, many Americans will move away from full-time work, either by working fewer hours or abandoning the workforce entirely.
“Workers will choose to supply less labor,” the report reads, “given the new taxes and other incentives they will face and the financial benefits some will receive.”
Soon after the report was released, Republican leaders began touting the report as evidence that the Affordable Care Act was killing American jobs.
— NRCC (@NRCC) February 4, 2014
It’s important to note, though, that the CBO did not claim the Affordable Care Act will result in Americans losing jobs. Rather, the report argues that a contingent of Americans will begin working fewer hours than before or choose not to work at all. The report also notes that employment and compensation will continue to rise overall throughout the next seven years.
“The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply,” the report states, “rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week).”
In short, the CBO is reminding readers that this reduction in work hours will come from Americans themselves and will have a different effect than increased unemployment.
The White House was quick to respond to the report as well, reminding Republicans that the Affordable Care Act will not result in Americans losing jobs en masse.
“Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the CBO report,” White House Press Secretary Jay Carney said in a statement.
“CBO’s findings are not driven by an assumption that ACA will lead employers to eliminate jobs or reduce hours, in fact, the report itself says that there is ‘no compelling evidence that part-time employment has increased as a result of the ACA.’”
The CBO also found that there will likely be a large surge in signups for health insurance plans through federal and state online marketplaces as the deadline approaches in March. The organization noted, though, fewer than initially expected may sign up “in light of technical problems that impeded many people’s enrollment in exchanges in the first months of the open enrollment period.”
The CBO claimed that enrollment will eventually catch up, with as many as 24 million Americans signing up for health insurance through online marketplaces in 2017.