ACA Impact on Total Employment

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA Impact Analysis >> ACA Impact on Employment/Economy >> ACA Impact on Total Employment (last updated 2.27.17)

Theoretical Impact

  • Changes in Demand for Labor. The employer mandate raises the cost of labor, so hypothetically will reduce overall demand. But the mandate applies only to full-time workers working 30 hours a week or more, creating a hypothetical incentive to reduce worker hours to avoid the mandate. Note that to the extent employers substitute part-time workers for full-time workers, total employment hypothetically could rise. However, there would be a corresponding rise in involuntary part-time workers, i.e., those who “would like to work full time but were working part time (1 to 34 hours) because of an economic reason, such as their hours were cut back or they were unable to find full-time jobs, workers employed part-time involuntarily.”
  • Reduction in Hours. “The decline in full-time-equivalent employment stemming from the ACA will consist of some people not being employed at all and other people working fewer hours; however, CBO has not tried to quantify those two components of the overall effect” (p. 117).
  • Almost Entirely Due to Supply Side Incentives. “The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ 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 (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week)”  (p. 117-118).
  • Low Wage Workers Most Affected. “Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked (p. 117).

There will be several different reasons for the reduction in employment among those who voluntarily reduce hours:

Employer Opinion Surveys

This section focuses on the ACA’s impact on employment as measured from surveys of employers that report either on actions taken or projected in response to the law. Items are in reverse chronological order.

  • Business Roundtable First Quarter 2016 CEO Economic Outlook Survey. (3.17.16) 38% of Companies to Reduce Employment in 2016, Only 29% Expect Increase: Five Consequences. “Is the part-time hiring binge that has inflated job numbers for at least two years come to an end? I think so. More importantly, so do CEOs of large corporations. In December, a quarterly survey of large corporation CEOs showed a minuscule net of 1% (35% to 34%) of corporations expected an increase in hiring. 31% expected no change. The latest quarterly survey shows nearly 10% (29% to 38%) of large corporation CEOs expect to reduce headcount. The remaining 33% expect no change. Let’s dive into the Business Roundtable First Quarter 2016 CEO Economic Outlook Survey for more details…What happened? Obamacare!”
  • Federal Reserve Bank Surveys (July 2013). A survey by the New York Federal Reserve of manufacturers in the state found that 7.6% plan to fire or refrain from hiring in order to stay under the mandate. A parallel factory survey by the Philadelphia Federal Reserve had similar results: 5.6%.  Newsweek’s Robert Samuelson reports that in the same survey, “6.5 percent had already refrained from hiring or had fired workers to stay below the 50-worker threshold. A survey by the Philadelphia Federal Reserve produced a similar response.”  These surveys were from a single industry in a single state, so it is difficult to extrapolate. But it is roughly consistent with the Chamber survey (17% x 24% =4.1%).
  • Sageworks (July 2013). In a Sageworks survey of 300 accounting professionals, “66 percent say they expect the Affordable Care Act will make it less likely that businesses will add new employees in the next year.”
  • Chamber of Commerce (June/July 2013). A Chamber of Commerce survey of 1,304 Small Business Executives (defined as executive level position in a company with fewer than 500 employees and annual revenue less than $25 M) conducted June 21-July 8, 2013 found that:
  • Gallup (June 2013). A poll commissioned by Littler Mendelson, which specializes in employment law, interviewed 603 owners whose businesses have under $20 million in annual sales. According to CNBC “Forty-one percent of the businesses surveyed have frozen hiring because of the health-care law known as Obamacare. And almost one-fifth—19 percent— answered “yes” when asked if they had “reduced the number of employees you have in your business as a specific result of the Affordable Care Act.”
  • Adecco (January 2013). “A January survey by human resources consulting firm Adecco that half of small businesses said they planned to cut jobs, not hire new workers, or shift to more part-timers because of the law.”

Employment Data: Establishment Surveys

This section focuses on the ACA’s impact on employment as measured from surveys that directly measure employment. Employment is measured using both employer surveys and household surveys. The “establishment” survey “is historically more accurate and less prone to errors, plus business and government employment can eventually be compared against tax records and verified.” As well, “the household survey produces somewhat volatile monthly results, so most economic forecasters focus on the BLS’ monthly employer survey” to measure increases in employment.

  • Bureau of Labor StatisticsEmployer Survey Data. The latest figures for October 2015 show total nonfarm employment rose by 271,000–which is lower than the 320,000 net increase in employment implied by the household survey.
  • American Action Forum
    • January 2017. Obamacare’s Impact on Small Business Wages and Employment. “Using data from the U.S. Census Bureau, the Medical Expenditure Panel Survey (MEPS), and Bureau of Labor Statistics (BLS), AAF once again examined the impact of premiums on weekly pay, employment, business establishments, and total wage earnings before and after the ACA became law… We found that since the ACA became law, among small businesses, the rise in premiums has been associated with $19 billion in lost wages, 10,130 fewer business establishments, and nearly 300,000 lost jobs, with seven states losing more than 10,000 jobs.
      • Employment. For firms with 20 to 49 workers, a one percent increase in employer contributions to premiums was associated with a 0.053 percent decline in employment.
      • Number of Business Establishments. During the pre-ACA period, a one percent increase in employer contributions to premiums was significantly associated with a 0.065 percent increase in the number of businesses with 20 to 49 workers. After the ACA became law, however, a one percent increase in employer contributions to premiums was significantly associated with a 0.054 percent decrease in the number of those firms.
      • Average Weekly Pay. For firms with 20 to 49 workers… a one percent increase in total premiums was associated with a 0.012 percent decrease in average weekly pay. Employer contributions to premiums had an even stronger negative relationship with weekly pay in the smaller firm category… a one percent increase in employer contributions to premiums was associated with a 0.022 percent decrease in weekly pay. The impact of health insurance premiums on average weekly pay after the ACA became law was much more pronounced among firms with 50 to 99 workers.
      • Total Wage Earnings. Since total wage earnings takes into account both changes in pay and employment, these results just provide more evidence that increases in premiums after the ACA became law was particularly detrimental for workers in firms with 20 to 49 employees… a one percent increase in employer contributions was significantly associated with a 0.076 percent decrease in total wage earnings in those businesses.
      • Average Premium Costs. Before the ACA in 2009, employer contributions to health insurance premiums averaged $3,713.50 annually across all 50 states. In 2015, state average employer contributions were $4,703.58, a 26.7 percent increase. The increase in employer contributions to health insurance premiums generally hovered around 25 percent. But the increases in some states have been quite severe. For instance, between 2009 and 2015 employer contributions to premiums increased 36.2 percent in Hawaii, 42 percent in North Dakota, 45.9 percent in Kentucky, and 47.6 percent in Ohio.”
    • September 2014. Gitis, Ben, Ryan, Conor, Batkins, Sam. Obamacare’s Impact on Small Business Wages and Employment. “To analyze the relationship between the ACA, health insurance premiums, and labor market conditions, we estimate how changes in premiums relate to annual average state employment and average weekly pay in private businesses with 20 to 49 workers and those with 50 to 99 workers before and after the ACA. We employ state-level labor market data from the Bureau of Labor Statistics (BLS) and use average annual employment and average weekly pay for both business sizes. Meanwhile, we use premium data from the Medical Expenditure Panel Survey (MEPS) for the same period. Our data set includes observations on all 50 states in each year from 2003 to 2012. American Action Forum (AAF) research finds that:
      • Lower Pay. Affordable Care Act (ACA) regulations are reducing small business (20 to 99 workers) pay by at least $22.6 billion annually.
      • Lower Employment. In addition, ACA regulations and rising premiums have reduced employment by more than 350,000 jobs nationwide, with five states losing more than 20,000 jobs. While there was no significant relationship between healthcare premiums and employment before the ACA, since 2010 small businesses have slowly started shedding jobs and reducing wages.
      • Loss per Employee. We found that, on average, employees who work a full year for a business with 50-99 employees lose $935 annually due to ACA regulations, while employees of businesses with 20-49 employees, on average lose $827.50 annually.”
  • Census Bureau Data
    • No Impact on Early Retirement (October 2015). “One prediction of the impact of the healthcare law, commonly known as Obamacare, was that the ACA would end ‘job lock’ – the phenomenon of workers hanging onto jobs just for the health insurance while waiting to become eligible for Medicare at age 65. Instead, the ACA’s guaranteed issue of insurance would let them leave the world of full-time work for more flexible self-employment, start businesses or launch encore careers – or just retire. A 2013 study by the Urban Institute’s Health Policy Center and Georgetown University’s Health Policy Institute, for instance, forecast that health reform would boost the number of self-employed people by 1.5 million. But new research shows the ACA has not turned the job-lock key – at least not yet. A team of University of Michigan researchers studied Census Bureau employment data for 2014 – the first full year of the law’s implementation – and found no evidence of a higher rate of retirement, or a shift to part-time work, for Americans age 55 to 64” (Reuters, 10.2.15).

Employment Data: Household Surveys

Evidence from States

Two states have adopted mandated health benefits. They provide indirect evidence of the effects that might be expected under the ACA. See here for discussion of evidence from these same states about the impact of an employer mandate on hours of work and part-time employment.

  • Hawaii. Buchmueller TADiNardo J, and Valletta RG (2011)The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from HawaiiAmerican Economic Journal: Economic Policy. Volume 3, Issue 4, Pages 25-41, 2011. We examine the effects of the most durable employer health insurance mandate in the United States, Hawaii’s Prepaid Health Care Act, using Current Population Survey data covering the years 1979 to 2005. We find that Hawaii’s law increased insurance coverage over time for worker groups with low rates of coverage in the voluntary market. We find no statistically significant support for the hypothesis that the mandate reduced wages and employment probabilities. Instead, its primary detectable effect was an increased reliance on part-time workers who are exempt from the law. We arrive at these conclusions in part by use of a variation of the classical Fisher permutation test that compares the magnitude of the estimated “Hawaii effect” to “placebo effects” estimated for the other US states.
  • Massachusetts. Qu, Dan (2010)Health Insurance, Pensions and Wages (2010). University of South Carolina. Theses and Dissertations. Paper 392. The third chapter uses 2004, 2005, 2007 and 2008 Current Population Survey and merged Outgoing Rotation Group data and examines industry-level EHI coverage, average hourly wage, employment and working hours in Massachusetts and several neighboring states before and after the passage of a Massachusetts law mandating EHI for most workers. Results in this study are partially consistent with the prediction. They suggest that industries with a higher initial EHI coverage experience an increase in EHI coverage, a decrease in employment and a decrease in the percentage of workers that are full-time. However, there is no clear wage effect on such industries. The policy effect also appears to vary with firm size. A higher percent of medium firms in an industry tends to be associated with the mandate lowering EHI coverage and the average hourly wage, but increases in the percentage of workers that are full-time. One overall effect of the policy does appear to be a decrease in employment as a result of the law.

Anecdotal Evidence

  • The Cato Institute, Michael Cannon (2.4.16). Obamacare Is Destroying Jobs–And Here’s The EvidencePresents a compilation of media reports of impact by state, concluding that “our search was by no means comprehensive, yet it turned up reports from nearly every state showing that Obamacare is forcing employers to eliminate jobs, reduce hiring, and reduce workers’ hours to below 30 per week.”
  • Cowley, Stacy (November 2015)Health Care Law Forces Businesses to Consider Growth’s Costs. New York Times (11.18.15).
    • When LaRonda Hunter opened a Fantastic Sams hair salon 10 years ago in Saginaw, Tex., a suburb of Fort Worth, she envisioned it as the first of what would eventually be a small regional collection of salons. As her sales grew, so did her business, which now encompasses four locations — but her plans for a fifth salon are frozen, perhaps permanently. Starting in January, the Affordable Care Act requires businesses with 50 or more full-time-equivalent employees to offer workers health insurance or face penalties that can exceed $2,000 per employee. Ms. Hunter, who has 45 employees, is determined not to cross that threshold. Paying for health insurance would wipe out her company’s profit and the five-figure salary she pays herself from it, she said. “The margins are not big enough within our industry to support it,” she said. “It’s not that I don’t want to — I love my employees, and I want to do everything I can for them — but the numbers just don’t work.”
    • Mr. Sergio offers health insurance to his permanent staff, but the premiums have risen so quickly that he had to switch to a more restrictive plan, with a higher deductible. He is reluctant to go over the 50-employee line and incur all of the new rules that come with it. That makes bidding for new jobs an arduous and risky exercise. “I’ve had to pull my controller and a couple of top people to sit and spend days going through this,” he said. “If you ramp up, and it pushes you over 50, there’s all these unknown costs and complicated rules. Are we really going to be able to benefit from going after that opportunity? It freezes you at a time when you need to be moving fast.”
  • Panera Bread (November 2015). DailySignal reports (11.5.15) reports in a story titled “Panera Bread CEO Says Digital Ordering May Soon Replace Labor at Renovated Cafes”: “According to Panera, the company had suffered rising labor costs throughout their third quarter operating margin. Panera’s profit and loss statement, according to Chief Financial Officer Mike Bufano, showed that ‘labor cost was again the most significant driver of operating margin decline.’ Statutory increases in minimum wage along with inflation and benefit costs associated with the Affordable Care Act were noted by Bufano as two of three factors ‘contributing to the labor deleverage.’”
  • Joyce M. Rosenberg (August 2013). “Businesses Seek Cure For Health Care Cost Surge,” Associated Press, 8/14/13. “The expected surge in health insurance costs under the ACA has many small business owners changing the way they operate. For many like Hartnett, hiring and expanding is going on the back burner. Others expect to cut back on some of the services their companies provide, raise prices or cut employees’ hours and bonuses.” Specifically:
    • 26% report they have held back on hiring.
    • 20% of small businesses have held off on implementing a growth strategy because of rising health care costs
    • “If health insurance for the employees at Havana Central’s four restaurants becomes too expensive, owner Jeremy Merrin may have to limit the number of people waiting tables and stop delivery service. …’We’re going to work as hard as we can to hire as few people as possible,’ says Merrin, who has four restaurants in the New York metro area.”
  • Chippewa County, WI (August 2013). “[W]ill drop 15 part-time positions to avoid up to $163,000 in annual health care costs, the county administrator told Wisconsin Public Radio in April (Washington Post, 8.22.13).
  • Health-Care Law Spurs a Shift to Part-Time Workers. “Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker… Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell. The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands. CKE Restaurants Inc., parent of the Carl’s Jr. and Hardee’s burger chains, began two months ago to hire part-time workers to replace full-time employees who left. Home retailer Anna’s Linens Inc. is considering cutting hours for some full-time employees to avoid the insurance mandate if the health-care law isn’t repealed. Darden Restaurants Inc. was among the first companies to say it was changing hiring in response to the health-care law.” (Wall Street Journal, 11.4.12)
  • John Goodman (October 2012)Employers Get Ready for ObamaCare (10.16.12)

Research and Analysis

Theoretical Effects

  • John Goodman (July 2014). Will ObamaCare Cost You Your Job? (7.26.14)
  • Krauthammer, Charles (February 2014). Obamacare’s War on Jobs (2.13.14). “Pre-Obama, people always had the right to quit work to tend full time to the study of butterflies. It’s a free country. The twist in the new liberal dispensation is that the butterfly guy is to be subsidized by the taxes of people who actually work. In the traditional opportunity society, government provides the tools — education, training and various incentives — to achieve the dignity of work and its promise of self-improvement and social mobility. In the new opportunity society, you are given the opportunity for idleness while living parasitically off everyone else. Why those everyone elses should remain at their jobs — hey! I wanna dance, too! — is a puzzle Carney has yet to explain.”
  • Robert Book (December 2012). Why Obamacare Incentivizes Part-time Jobs (12.3.12)
  • John Goodman (October 2010)The $6-an-Hour Health Minimum Wage (10.18.2010)

Projected Labor Market Effects

Congressional Budget Office

  • December 2015How CBO Estimates the Effects of the Affordable Care Act on the Labor Market. The Affordable Care Act (ACA) will make the labor supply, measured as the total compensation paid to workers, 0.86 percent smaller in 2025 than it would have been in the absence of that law, the Congressional Budget Office estimates. Three-quarters of that decline will occur because of health insurance expansions, which raise effective tax rates on earnings from labor—for instance, by phasing out health insurance subsidies as people’s income rises—and thus reduce the amount of labor that workers choose to supply. The labor force is projected to be about 2 million full-time-equivalent workers smaller in 2025 under the ACA than it would have been otherwise. Those estimates were based mainly on CBO’s calculations of the effects of the law’s major components on marginal and average tax rates and on the agency’s analysis of research about the change in the labor supply resulting from a change in tax rates. For components of the law that were difficult to express in terms of changes in tax rates, CBO based its estimates on a review of the available literature about similar policy changes.
  • October 2015. Dynamic Scoring at CBO (10.21.15).  A dynamic analysis of the effects of repealing the ACA found “There is substantial uncertainty about budgetary effects and macroeconomic feedbacks.
    • Overall, repeal of the ACA is estimated to increase aggregate hours worked by about 1.5 percent between 2021 and 2025
    • That increase in hours translates into an increase in aggregate compensation of between 0.8 percent and 0.9 percent over the same period
    • Hours worked rise by more than compensation because lower wage workers would be most strongly affected by the repeal, so they would change labor supply the most
  • February 2014. Appendix C: Labor Market Effects of the Affordable Care Act: Updated Estimates in The Budget and Economic Outlook: 2014 to 2024 (2.2.14).
    • CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive.
    • Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked.
    • Specifically, CBO estimates that the ACA will cause a reduction of roughly 1 percent in aggregate labor compensation over the 2017–2024 period, compared with what it would have been otherwise.
    • The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.
  • October 2010.  Elmendorf D. “Economic Effects of the March Health Legislation.” Presentation at the Schaeffer Center of the University of Southern California, October 22, 2010. The legislation will reduce the amount of labor used in the economy by roughly half a percent, primarily by reducing the amount of labor that workers choose to supply.
  • July 2009Effects of Changes to the Health Insurance System on Labor Markets (7.13.09). This report examines the impact of a variety of alternative approaches to health reform. “The overall impact on labor markets, however, is difficult to predict. Although economic theory and experience provide some guidance as to the effect of specific  provisions, large-scale changes to the health insurance system could have more extensive repercussions than have previously been observed and also may involve numerous factors that would interact—affecting labor markets in significant but potentially offsetting ways.”

Other Analyses

  • Joseph Antos and James Capretta (2.3.16)The ACA And Its Employment Effects. “Two studies published in the most recent Health Affairs journal raise questions about the contention that the Affordable Care Act (ACA) will reduce employment, wages, and hours worked by employees. The study by Gooptu and colleagues examined the effects of the law’s Medicaid expansion on employment and found no statistically significant effect through March 2015. A related study by Moriya and colleagues examined the subsidy structure provided to households getting health insurance through the ACA’s exchanges and similarly found no discernible effect on levels of part-time employment for employees eligible for these subsidies…At a minimum, they make it clear that the forecasts from CBO and others which show the ACA will eventually reduce compensation and hours worked are far from certain. But it is also too early to conclude that those forecasts were wrong. That remains to be seen.”
  • “Independent, nonpartisan experts project only a ‘small’ or ‘minimal’ impact on jobs, even before taking likely job gains in the health care and insurance industries into account” (1.7.11).
  • Lewin Group (March 2010).  This analysis of the Senate bill enacted 3.23.10 estimates the ACA will result in job lossses of between 150,000 and 300,000. However, neither this number nor the one for the House bill factors in any jobs that would likely be added in the health care sector.
  • Beacon Hill Institute (March 2010). This study projects a loss of between 119,000 and 698,000 jobs between enactment of the bill in 2010 and 2019 (3.17.10)
  • Center for American Progress (CAP) (March 2010). This study calculates that ACA would create 250,000 to 400,000 jobs per year over 10 years.
  • NFIB Research Foundation (January 2009). Chow MJ and Phillips BD (January 2009)Small Business Effects of a National Employer Healthcare Mandate. Nashville, TN: NFIB Research Foundation, January 26, 2009. This study projected a 1.6 million job loss under a hypothetical employer mandate, along with 890,000 new jobs created in the health sector, for a net loss of about 700,000 jobs.  However, because the authors never scored the ACA as enacted, this estimate provides limited insight.

Actual Labor Market Effects

  • CBO (November 2015). CBO’s Assessment of the Economic Outlook Over the Next Decade (11.19.15).
    • A chart on Employment Shortfall (p. 11) shows no shortfall just prior to the 2007-2009 recession, rising to a peak of more than 9 million in late 2009 (most due to unemployment, but nearly 2 million due to lower labor force participation). Except for a handful of fluctuations, the shortfall has declined steadily since mid-2011 but by mid-2015 was still over 2.5 million (with nearly 2 million attributable to lower labor force participation). CBO projects the shortfall will have virtually disappeared by 2019.
    • A chart on Labor Force, Employment and Unemployment (p. 12) shows 2015 labor force participation at 63% (59% actually employed, 4% unemployed), a level not seen since late 1970’s (participation peaked in the late 1990’s). By 2025, participation is expected to fall to 61% (58% employed, 3% unemployed).
    • A chart on Labor Force Participation Rates (p. 13) shows that potential labor force participation rates have been steadily declining from about 66% in 2003 to 63% in 2015. The actual participation rate matched the potential rate in the several years before the 2007-2009 recession; subsequently, a steadily growing gap peaked in around 2013 and has shrunk steadily since then, with CBO projecting the gap to be closed around 2018 (the potential rate continues to decline to 61% in 2025).
  • Bradley Heim, Ithai Lurie, Kosali Simon (December 2015). The Impact of the Affordable Care Act Young Adult Provision on Labor Market Outcomes: Evidence from Tax Data. Despite sizable increases documented elsewhere in insurance coverage resulting from this law, we find no meaningful changes in labor market related outcomes. We examine a comprehensive set of outcomes (including measures of employment status, job characteristics, and post-secondary education), and are the first to use a triple difference strategy to examine labor market effects of this law; we are also the first we know of to use tax data to examine the impact of the ACA on labor market outcomes. Although it is possible that labor market outcomes have changed in ways not captured by tax data (e.g. a change in hours of work while holding total wages constant, or a change in non-reported self-employment), our evidence suggests that the extension of health insurance to young adults did not substantially alter their labor market outcomes thus far.
  • Robert Kaestner, Bowen Garrett, Anuj Gangopadhyaya, Caitlyn Fleming (December 2015). Effects of ACA Medicaid Expansions on Health Insurance Coverage and Labor Supply. NBER Working Paper No. 21836. We examined the effect of the expansion of Medicaid eligibility under the Affordable Care Act on health insurance coverage and labor supply of adults with a high school education or less. We found that the Medicaid expansions increased Medicaid coverage by approximately 4 percentage points, decreased the proportion uninsured by approximately 3 percentage points, and decreased private health insurance coverage by 1 percentage point. The Medicaid expansions had little effect on labor supply as measured by employment, usual hours worked per week and the probability of working 30 or more hours per week. Most estimates suggested that the expansions increased employment slightly, although not significantly.
  • John Goodman (July 2012)Is ObamaCare Causing the Jobless Recovery? (7.16.12). The jobs numbers tell two different stories, as the second graph shows. In terms of hours worked, the labor market has recovered. But in terms of the actual number of people working, we haven’t even started to recover. People with jobs are working just as many hours as they did before the recession began. This is consistent with the incentives under ObamaCare: Nothing happens to the employers’ health care costs if people work additional hours. However, there is a substantial increase in health care costs, if the employer hires one more worker. This may be the reason for the jobless recovery.

Tax-Related Job Impacts

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