August 19, 2016
In his Washington Post business section column Gene Marks made a classic journalistic mistake: he reported what people claim to be the case as fact. Specifically, he reported that employers are curtailing hiring and increasing part-time employment in response to Obamacare. In fact, the basis for this assertion is a survey of 200 business executives by the New York district Federal Reserve Bank.
There are two basic problems here. The business executives may be inclined to say they are cutting jobs or increasing part-time work because of the Affordable Care Act (ACA), even if it’s not true, because they don’t like the ACA. The other problem is that they may not know the exact effects of the ACA (actually, no one does), so their response may be based on factors that are not attributable to the ACA.
Specifically, the survey indicated that the executives were responding to a large increase in insurance premiums this year. However, the rise in premiums had been quite low in prior years. It would be difficult to determine how the path of health care costs has been changed by the ACA, but it is indisputable that the growth path has been considerably slower than was expected when the ACA was passed in 2010. So unless these executives can somehow determine that they are paying more for insurance today because of the ACA, they actually don’t have a basis for saying that their response to the latest rise in premiums is a response to the ACA.
Economists tend to look at what people do rather than what they say. In this category, the data tell a story that is the opposite of what is indicated by the survey. Job growth has been very fast since the ACA went into effect. In addition, the number of people involuntarily working part-time has fallen sharply. It is down by 23.5 percent since the exchanges and Medicaid expansion went into effect in January of 2014.
There has been a substantial increase in the number of people choosing to work part-time, notably young parents. (These are presumably parents of young children, but we only have data on the parents’ ages.) This is one of the intended effects of Obamacare. By allowing people to get insurance from outside of employment, Obamacare made it possible for many parents to get insurance without working at a full-time job that provides health care as a benefit.
It is interesting to know what business executives have to say about the impact of Obamacare, but it is a serious error to report this as truth.
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