Despite Criticisms, Health Care Law’s Impact on Jobs Is Still Unclear

John Boehner

But to many independent economic analysts, it remains too early to tell how the sweeping Affordable Care Act will affect the jobs market.

The health care law expands insurance coverage to tens of millions of Americans, in part through the “exchanges” that began enrollment this week, and later through rules mandating that certain businesses provide coverage. The government has shut down in no small part because of Republican opposition to the law on economic grounds: It is harming businesses and sapping strength from the economy, they argue.

But major provisions of the law have yet to take effect, meaning many of the assertions about how the law is slashing hours or encouraging part-time employment are not backed by statistical evidence, economists from across the political spectrum said. “The script is still being written,” said Mark Zandi of Moody’s Analytics. “I don’t see any evidence Obamacare is impacting the job market.”

N. Gregory Mankiw, a Harvard economist who worked in President George W. Bush’s administration, agreed. Asked how much the Affordable Care Act had affected the economy so far, he said, “Probably not a whole lot.”

Economists said that in time the law might have an enormous and varied impact on the labor market, including on the behavior of millions of workers and businesses. Part-time work may increase, as may worker mobility, job-switching and entrepreneurship rates. For some workers, hours may decrease.

But the current data do not show the health law affecting job growth, wage growth or the proportion of part-timers in the labor force, Dr. Zandi and other economists said. With major portions of the law still not in force — including the Medicaid expansion in about half the states, the subsidized insurance exchanges in all of them and the so-called employer mandate requiring certain businesses to offer insurance coverage — it is too soon to tell.

“The data are not really there to reach any firm conclusions,” Dr. Mankiw said. He said the assertions that the health law was destroying jobs was “a hypothesis” about future effects. “Both sides are being hyperbolic — Democrats on the effects on health costs and Republicans on the effects on jobs,” he said.

Anecdotal reports about the law’s effect on jobs have grabbed headlines over the past year. Major retailers like Trader Joe’s and Home Depot said they would no longer provide coverage for part-time workers, instead having them buy it on the exchanges.

Food-service chains like White Castle have said they might hire more part-time employees because of the Affordable Care Act.

“I would like to tell you we’ve continued to open more restaurants in more neighborhoods, providing more jobs, and serving more customers,” Jamie Richardson, a White Castle executive, told a Congressional committee this summer. “I’d like to tell you that, but I can’t. In fact, White Castle’s growth has halted” because of the law, he said.

More broadly, businesses big and small are concerned about how the law may affect their hiring practices. In a Chamber of Commerce survey in July, about three-quarters of small businesses said the law had made it harder to hire. Of those affected by the employer mandate, half said they would cut employees’ hours or replace full-time workers with part-time.

Opponents of the law have pointed to recent data showing growth in part-time employment as an early sign of the law’s negative effects. In the past year, the number of part-time workers has climbed by 253,000. 

But economists say that a closer look at the data shows no signs that the health law is changing hiring patterns — at least not yet. The number of part-time workers for economic reasons — meaning those who would prefer to work full time — has dropped to 7.9 million from 9.1 million since the law was passed. And the proportion of all workers who are part-timers has remained steady at about 19 percent for the past year, down a percentage point from a post-recession peak of 20 percent in 2010.

That rate is elevated, economists said, but the sluggish economy and demographic trends are to blame, not the new health law.

Leave a Reply