Lunchtime Must-Read: Ezra Klein: Republicans Discover Evidence of Jobs Crisis
Ezra Klein: Republicans Discover Evidence of Jobs Crisis:
The U.S. has been in a jobs emergency since at least 2008. The cause of the crisis — too little demand — isn’t mysterious, and neither are the solutions… invest in infrastructure to create construction jobs… give tax breaks to employers who hire… restore the payroll tax cut… help state and local governments hire back some of the employees they laid off…. But in recent years, these policies have been either blocked or canceled by congressional Republicans…. That’s the proper context in which to view this week’s hysteria about Obamacare….
In past reports, the CBO has estimated that the law will, on net, lead some people to drop out of the labor market or cut back on their hours because their health insurance is no longer tied to their job…. Previously, the CBO had estimated this would reduce total hours worked by about 0.5 percent. Now, it estimates the effect at 1.5 percent to 2 percent of hours worked…. The CBO was very clear about what this means: “The estimated reduction stems almost entirely from a net decline in the amount of labor workers choose to supply, rather than from a net drop in business’ 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.” The CBO’s clarity didn’t forestall a festival of motivated misreadings….
Whether this is good or bad depends on your views about human flourishing. Lower labor-force participation is bad for economic growth. On the other hand, the point of life is not for everyone to work every possible hour until they die. Workers should be able to choose to leave their jobs or cut their hours without worrying that their families won’t survive a medical emergency. In addition, as the Urban Institute’s Donald Marron tweeted, “employers will be competing harder for workers,” which will push wages to rise for everyone remaining in the workforce…. Is it really the Republican position that we should… cut aid… [for the] long-term unemployed, but express shock and terror that employed people will, in a few years, cut back their hours or leave the labor force by choice? Shouldn’t we be more concerned about people desperate to join the workforce, who can’t, than about people voluntarily leaving the workforce, who can?