Creating Jobs By Making People’s Lives Worse

Persistent high unemployment has led a lot of the national dialogue about economic policy to start focusing very reductively on “jobs” and the question of “job creation” or allegations that various policies are “job killers.” In normal times, we talk instead about, say, prosperity or rising living standards. The two are, at times, different. For example, during yesterday’s debate, Michele Bachmann claimed that a CBO study showed that the Affordable Care Act is eliminating jobs. One natural way to read that would be that the Affordable Care Act is eliminating employment opportunities. In other words, if you’re unemployed, the ACA is out there making it harder for you to find a job.

In fact, what the CBO said was that “the law would have a ‘small’ impact on the overall labor force because it might cause some workers to reduce their hours or retire earlier.”

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Making it harder for people who want jobs to find them, and making people less inclined to want to work, both reduce aggregate employment. But they’re very different things. Policies that work by altering the size of the labor force are totally different from policies that work by changing the share of the labor force that has job opportunities. If we halted payment of all Social Security benefits tomorrow, then the number of senior citizens in the labor force would skyrocket and overall employment would almost certainly shoot up. But would we be helping unemployed people that way? No. If anything we’d be making it harder for the people currently looking for work to find any. Bachmann’s complaint about the ACA is just this policy in reverse. Some people who might otherwise prefer to work part-time are currently working full-time in order to get health insurance benefits. Some people who might otherwise prefer to retire are currently working full-time in order to get health insurance benefits. A universal health care insurance will change that. Which is to say that a universal health insurance system will make their lives better and make it easier for them to do what they want.