Grace-Marie Turner Distorts Data About Health Care Law's Impact On Job Creation
Last week, Grace-Marie Turner, founder and president of the conservative Galen Institute, penned an op-ed in which she claimed that repealing the health care law would create jobs. She backs this claim up by twisting statistics from anti-health care reform groups like the U.S. Chamber of Commerce, the Heritage Foundation and the National Federation of Independent Businesses (NFIB) to fit her goal of proving that the law is discouraging hiring and increasing job losses. But the fact remains that despite the often repeated claim that "the health law is killing jobs," health care employment has grown over the past year and repealing the law would actually reduce employment.
Turner Misleadingly Cites U.S. Chamber Of Commerce Study On Employers' Biggest Obstacle To Hiring
The law is discouraging businesses from hiring. According to a recent U.S. Chamber of Commerce survey, 39 percent of small business owners say the law is either their greatest or second-greatest obstacle to new hiring. [Sacramento Bee, 9/1/11]
Chamber Study Shows Top Obstacle To Hiring Is Economic Uncertainty
Chamber Of Commerce Study Shows Economic Uncertainty To Be The Top Obstacle To Hiring. A Harris Interactive poll conducted for the U.S. Chamber of Commerce in July 2011 shows economic uncertainty to be the greatest or second greatest obstacle to hiring more employees with 55 percent of respondents. The second greatest obstacle cited was a lack of sales for 34 percent respondents. The requirements of the health care bill ranks fourth amongst respondents with 33 percent, not 39 percent as Turner cites.
[U.S. Chamber of Commerce, July 2011]
Turner Misrepresents CBO Report, Elmendorf Testimony
The law also discourages people from seeking work. The director of the Congressional Budget Office, Douglas Elmendorf, said earlier this year the health law will mean 800,000 fewer workers in the American labor force. He said this is due to provisions in the health law that "will effectively increase marginal tax rates, which will also discourage work." [Sacramento Bee, 9/1/11]
Health Care Law Would Change Supply In Labor For Small Segment Of The Population Due To Insurance Being Available Outside Of Work
CBO Director Elmendorf Testified That Health Care Reform Reduces The Supply Of Labor, Not Jobs. From the video of CBO Director Douglas Elmendorf testifying before the House Budget Committee:
REP. JOHN CAMPBELL (R-CA): ...First on health care before I get to broader issues. You just mentioned that you believe or that in your estimates, that the health care law would reduce the labor used in the economy by about one half of one percent. Given that I believe you say there's 160 million full-time people working in 2021 that means that in your estimation, the health care law reduce employment by 800,000 in 2021. Is that correct?
ELMENDORF: Yes, the way I would put it, is we do estimate, as you said, that the household employment will be about 160 million by the end of the decade. Half a percent of that is 800,000. That means that if the reduction in the labor used was workers working the average number of hours in the economy, and earning the average wage, that there will be a reduction of 800,000 workers. In fact, as we mentioned in our analysis last summer, the legislation also creates some incentives that might affect the number of hours people worked, it might affect the propensity to work of lower and higher income people. We haven't tried to quantify those things, but the impact is that the 800,000 might not be exactly the number, but it is equivalent of withdrawing 800,000.
[House Budget Committee hearing, 2/10/11, via YouTube.com]
CBO Report Says Health Care Law Will "Reduce The Amount Of Labor That Workers Choose To Supply." From a CBO report discussing the health care law:
The Congressional Budget Office (CBO) estimates that the legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent — primarily by reducing the amount of labor that workers choose to supply.
[CBO.gov, August 2010, emphasis added]
AP: Changes In Supply Of Labor "Would Come From People Who No Longer Have To Work...Because Insurance Will Be Available Outside The Job." From the Associated Press:
[The GOP] cites the 650,000 lost jobs as Exhibit A, and the nonpartisan Congressional Budget Office as the source of the original analysis behind that estimate. But the budget office, which referees the costs and consequences of legislation, never produced the number.
What follows is a story of how statistics get used and abused in Washington.
What CBO actually said is that the impact of the health care law on supply and demand for labor would be small. Most of it would come from people who no longer have to work, or can downshift to less demanding employment, because insurance will be available outside the job.
"The legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent — primarily by reducing the amount of labor that workers choose to supply," budget office number crunchers said in a report from last year.
That's not how it got translated in the new report from Speaker John Boehner, R-Ohio, and other top Republicans.
CBO "has determined that the law will reduce the 'amount of labor used in the economy by roughly half a percent,' an estimate that adds up to roughly 650,000 jobs lost," the GOP version said.
Gone was the caveat that the impact would be small, mainly due to people working less.
[Associated Press, 1/18/11, emphasis added]
CBO Report Explains "Effects On Financial Resources And Marginal Tax Rates Will Apply Only To A Small Segment Of The Population." From the CBO report Turner quoted:
The expansion of Medicaid and the availability of subsidies through the exchanges will effectively increase beneficiaries' financial resources. Those additional resources will encourage some people to work fewer hours or to withdraw from the labor market. In addition, the phaseout of the subsidies as income rises will effectively increase marginal tax rates, which will also discourage work. But because most workers who are offered insurance through their jobs will be ineligible for the exchanges' subsidies and because most people will have income that is too high to be eligible for Medicaid, those effects on financial resources and marginal tax rates will apply only to a small segment of the population.
[CBO.gov, August 2010, emphasis added]
Turner Misconstrues Heritage Foundation's Statistics On Job Creation After Health Care Law's Passage
James Sherk of The Heritage Foundation compared the rate of job growth before and after the health law was enacted in March of 2009. His analysis shows that jobs creation came to a screeching halt in the month after the measure was enacted.
In the first 15 months of the Obama administration, there were early signs of an economic recovery with employers hiring workers at an average rate of 67,600 a month. But when the measure was signed into law in late March 2010, the hiring freeze began. In the 15 months after the law passed, the economy added a mere 6,500 jobs each month on average — less than one-tenth the pre-health-care act rate. [Sacramento Bee, 9/1/11, emphasis added]
Heritage Foundation Report Highlights Net Monthly Employment Changes Not Actual Employment Growth, Which Has Increased Since March 2010
Heritage Foundation Analysis Looks At Net Monthly Employment Changes, Not Actual Employment Growth. Heritage Foundation report simply shows that net monthly employment changes averaged 67,600 during the first 15 months of the Obama administration, not that they were hiring workers at that average rate as Turner suggests. During most of those months, employment was still declining by hundreds of thousands of jobs every month. By contrast, in every month since the Affordable Care Act was passed, private-sector employment has grown.
- Heritage Foundation Report Notes Their Statistics "Cannot Prove Causation." From the same Heritage Foundation report cited by Turner: "The fact that improvements in the job market ground to a halt after Congress passed Obamacare does not prove that the health care law caused it—correlation cannot prove causation." [Heritage Foundation, 7/19/11]
Since March 2010 The Private Sector Has Added Jobs Every Month. Katharine Abraham, President's Council of Economic Advisors member, posted a graph on the White House blog based on BLS data for monthly private sector job gains and losses:
Turner Claims Health Care Law Is Responsible For Self-Checkout Systems In Stores And High Levels Of Teen Unemployment
Starting in 2014, employers will be forced to provide expensive government-approved policies or pay federal fines. Larger companies already are starting to pare back on entry-level jobs, and some are automating to avoid the added cost of employing actual people.
McDonald's restaurants and CVS drug stores, for example, are replacing some human order-takers and cashiers with electronic ordering and check-out systems. This especially hurts entry-level employees who need jobs to so they can get the skills to enter the workforce. Is it any surprise that teen unemployment has now hit 25 percent? The jobs they need are evaporating. [Sacramento Bee, 9/1/11]
Self-Service Checkout Systems Already Prevalent In Retail Stores Prior To Health Care Law
Growth Of Self-Service Checkout Systems Affected Retail Employment Prior To Health Care Law. From the Bureau of Labor Statistics:
Employment of cashiers is expected to grow by 4 percent between 2008 and 2018 which is slower than the average for all occupations. Continued growth in retail sales is expected, but the rising popularity of purchasing goods online will limit the employment growth of cashiers, although many customers still prefer the traditional method of purchasing goods at stores. Also, the growing use of self-service checkout systems in retail trade, especially at grocery stores, should have an adverse effect on employment of cashiers. These self-checkout systems may outnumber checkouts with cashiers in the future in many establishments. The impact on job growth for cashiers will largely depend on the public's acceptance of this self-service technology. [BLS.gov, December 2009, emphasis added]
Teen Unemployment Has Been High Since The Recession Began (And Before The Health Care Law Was Enacted)
Recession Was A "Jobs Disaster" For Teens. From Time:
The job market is tough for everyone. But this recession has become a jobs disaster for 16-to-19-year-olds. "The numbers are incredible," says Andrew Sum, head of the Center for Labor Market Studies at Northeastern University and a nationally recognized expert on teen employment. "Proportionally, more kids have lost jobs in the past few years than the entire country lost in the Great Depression." [...]
From 2000 to early 2008, overall employment rose by about 10 million jobs. Teen employment headed in the other direction. By early 2008, teen employment had dropped by more than 1.5 million.
The problem is that older workers are crowding out kids. An economic expansion that at its height produced 11 million jobs, as was the case in the 2000s, isn't bad. But it is nowhere near as robust as the economic growth of the 1990s — which upped employment by 17 million jobs — or the increase of 20 million jobs in the expansion of the 1980s. What's more, 12 million people joined the workforce in the 2000s — a million more new workers than the number of jobs created in that period. With fewer jobs to go around, older workers are settling for jobs that used to go to teens. Baby boomers, hurt by recent stock-market downturns, are hanging around longer. From 2000 to 2007, for instance, the number of 55-to-64-year-olds working in the retail industry rose by 553,000. At the same time, the number of teens who were able to snag jobs at stores fell 419,000, from nearly 2 million. [Time, 1/18/10, emphasis added]
Teenage Unemployment Rate In August 2009 Reached Over 25 Percent. From the New York Times:
This August, the teenage unemployment rate — that is, the percentage of teenagers who wanted a job who could not find one — was 25.5 percent, its highest level since the government began keeping track of such statistics in 1948. Likewise, the percentage of teenagers over all who were working was at its lowest level in recorded history. [...]
Recessions disproportionately hurt America's youngest and most inexperienced workers, who are often the first to be laid off and the last to be rehired. Jobs for youth also never recovered after the last recession, in 2001.
But this August found more than a quarter of the teenagers in the job market unable to find work, an unemployment rate nearly three times that of the nonteenage population (9 percent), and nearly four times that of workers over 55 (6.8 percent, also a record high for that age group). An estimated 1.64 million people ages 16-19 were unemployed. [New York Times, 9/4/09, emphasis added]
Turner Misleadingly Cites Results Of Mercer Survey On Employers' Plans To Address Health Care Law's Coverage Requirements
Another survey by Mercer consultants found that many employers plan to cut part-time employees back to fewer than 30 hours a week so they don't have to provide them with health insurance. [Sacramento Bee, 9/1/11]
Just 14 Percent Of Employers Plan To Reduce Part-Time Workers Hours In Order To Avoid Providing Them With Health Insurance
Mercer Survey Shows That Just 14 Percent Of Employers Would Reduce Part-Time Worker Hours In Response To Health Care Law. From the Mercer survey:
The rule that employers must offer "affordable" coverage to all employees working an average of 30 hours or more a week in a month (or else be subject to penalties) is a very significant or significant concern for just 17% of all respondents, but for 37% of those in the wholesale/retail industry, which relies heavily on part-time labor. Among the 28% of respondents that have part-time employees but currently do not offer coverage to all employees working 30 or more hours per week (Fig. 7), one-half [14 percent of respondents] say that they are most likely to change their workforce strategy so that fewer employees work 30 hours or more a week. One-fourth are most likely to make all employees eligible for the current full-time employee plan, while 17% will offer only a lower-cost plan to part-timers. Only 7% say they would seriously consider making no or minimal changes to increase the number of eligible employees and instead pay the required penalty. No respondents thought they were likely to terminate employee health plan coverage as a result of this new rule (Fig. 8).
[Mercer, 8/1/11, emphasis added]
Turner Leaves Out Key Points In NFIB Study On Impact Of Health Care Law On Small Businesses
"Small employers think the consequences of (the law) will almost uniformly be negative," according to a survey by the National Federation of Independent Business' Research Foundation.
It found that small business owners "expect the new law will increase taxes, will increase the federal deficit, will not slow health insurance cost increases, will not ease their administrative burdens, and will not improve public health." [Sacramento Bee, 9/1/11]
NFIB Study Shows Health Care Law Is Not Forcing Small Businesses To Drop Coverage
NFIB Study: "Virtually No Small Employer Now Offering Expects To Drop Health Insurance." From ThinkProgress:
You'd expect the National Federation of Independent Businesses (NFIB) — a lobby that has practically aligned itself with the Republican party and is a co-plaintiff in a lawsuit challenging the constitutionality of the Affordable Care Act — to release a survey that substantiates the GOP's most popular criticisms of the law: it's a job killer that will force businesses to stop offering health care coverage. But that's not the story the group's latest report, One Year After Enactment Of PPCA, tells. Instead, the group's survey of small businesses finds that less than half of employers are familiar with the law (which itself says something about what they think about its impact) and relatively few expect to drop coverage as a result of it:
- The number of small employers offering employee health insurance has not changed appreciably in the last 12 months, the post-PPACA passage time frame.
- The number of small employers offering employee health insurance is likely to change little over the next 12 months. Virtually no small employer now offering expects to drop health insurance in the next year and virtually no nonoffering employer expects to add it in that time frame.
- [M]ost small employers indicate they will not drop unless a large number of employees leave. The survey did not ask if they had actually calculated the possible cost savings of doing so. Nor did it ask if they would drop their health insurance following a competitor's lead.
- 18 percent of small-business owners claim to be "very familiar" with the highly publicized health legislation. Another 40 percent report they are "somewhat familiar" and another 24 percent say they are "not too familiar" with it. The remainder, also 18 percent, are "not at all familiar" with the new law. [ThinkProgress, 7/25/11, emphasis original]
Turner Repeats False Claim That Health Care Law Is A Jobs Killer And That Repealing The Law Will Create Jobs
Clearly, the health law is killing jobs, not creating them, and the best thing that Congress could do to spur jobs creation is to repeal the unpopular health law and lift the heavy cloud of mandates and regulatory burdens threatening employers. [Sacramento Bee, 9/1/11]
The Health Care Law Does Not "Kill" Jobs And Is Good For The Jobs Market
PolitiFact Rated Claim That Health Care Reform Kills Jobs "False." From PolitiFact's fact check of House Majority Leader Eric Cantor's claim that the health care law is "job killing":
Republicans have used the "job-killing" claim hundreds of times — so often that they used the phrase in the name of the bill. It implies that job losses will be one of the most significant effects of the law. But they have flimsy evidence to back it up.
The phrase suggests a massive decline in employment, but the data doesn't support that. The Republican evidence is extrapolated from a report that was talking about a reduction in the labor supply rather than the loss of jobs, or based on measures that weren't included in the final health care law. We rate the statement False. [PolitiFact.com, 1/19/11]
McClatchy: "Saying That The Law Is A Job Killer Doesn't Necessarily Make It One." According to McClatchy:
Republicans have titled their effort to overturn the law the "Repealing the Job-Killing Health Care Law Act," and that's their favorite talking point against it. The House of Representatives will start debate on repeal Tuesday and probably vote Wednesday.
Saying that the law is a job killer doesn't necessarily make it one, however, and independent experts say that such a conclusion is at least premature, if not unfounded.
"The claim has no justification," said Micah Weinberg, a senior research fellow at the centrist New America Foundation's Health Policy Program. [McClatchy, 1/17/11]
The Affordable Care Act "Could Increase The Number Of Jobs In The United States By About 250,000 To 400,000 Per Year." According to the Center for American Progress: "In the analysis that follows, we combine these two studies to show that health care reform could increase the number of jobs in the United States by about 250,000 to 400,000 per year over the coming decade." [Center for American Progress, 1/8/10]
Repealing — Or Defunding — The Affordable Care Act Would Reduce Employment Across Industries. From the Center for American Progress:
Figure 4 shows the estimated employment change by industry in 2016 (omitting health care, which will have more employment). More than 200,000 jobs will be lost in manufacturing and nearly 900,000 jobs will be lost in nonhealth care services.
[Center for American Progress, 1/7/11]
BLS: Health Care Employment Has Grown By 306,000 Since August 2010. According to the Bureau of Labor Statistics: "Health care employment rose by 30,000 in August. Ambulatory health care services and hospitals added 18,000 and 8,000 jobs, respectively. Over the past 12 months, health care employment has grown by 306,000." [BLS.gov, 9/2/11]