Repealing Obamacare will create, not cut, jobs
Obamacare channeled billions of dollars out of the productive economy and diverted it toward a health-services sector that has become even more bloated than itwas before 2010.
Last July, Dr. Bob Kocher, a venture capitalist who served as a special assistant to President Obama when theAffordable CareActwas created, noted that more than half of all healthcareworkers today are administrators, up fromjust over a third before Obamacare became law.
These are paper pushers, not doctors and nurses— not the kind of jobswe should be bragging about.
Because Obamacare diverted money into health spending, technically lots of jobs have been added by the healthcare sector. This provides cover for a superficial story that Obamacare has been a jobcreation machine.
Scholars affiliated with theMilken Institute School of PublicHealth at GeorgeWashingtonUniversity estimate Obamacare repealwould kill 2.6 million jobs by 2019. Almost a million jobswould be lost fromhealth services while the balancewould be lost in construction, real estate, retail, finance and insurance.
Unfortunately, such research relies on the so-called “multiplier effect,” a politically seductive butmisleading type of analysis. To be sure, Obamacare throws money at hospitals, doctors’ offices and other health services. Those recipients build new facilities and hire moreworkers, who spend their paychecks in their communities.
But these are not true measurements of economic growth. If Congress just sent a fleet of helicopters to scatter banknotes fromthe sky, the same “multiplier effect” would take place: Peoplewould pick the money up and spend it. Businesses located near the drop zones might profit, and some might hire and expand. Jobs and the economywould not grow, however, because the effectwould be a mix of inflation and reduced spending in areas away fromthe drop zones.
In otherwords, excess job growth in health services comes at the expense of job growth in other sectors. And it is worse than that: Jobs in health services are actually recession-proof. Hospitals did not need Obamacare to keep adding jobs.
Nonfarm civilian employment peaked in January 2008 (at 138.4million jobs), just before the Great Recession, and bottomed out in February 2010 (at 129.7million jobs). Jobswere lost in 24 of those 25 months. Nonfarm civilian employment did not cross the January 2008 threshold again untilMay 2014.
However, more than half amillion jobs in health serviceswere added between January 2008 and February 2010. In other words, health services added jobs while the Great Recession destroyed 9.25 million other nonfarm civilian jobs before the Affordable CareActwas passed inMarch 2010.
Since then, Obamacare has caused a significant distortion of theAmerican workforce toward health services. This has continued even as the economy has slowly recovered.
By December 2016, theUnited States had added 6.87 million jobs to the previous peak in January 2008. However, 2.59 million jobs— 38 percent of the total— were in health services, which grew by 20 percent. By comparison, all other nonfarm jobs— inmanufacturing, transportation, mining, retail and services— grew only 3.42 percent, adding 4.29 million jobs.
And this counts only private health services, not insurers and other middlemen or government employees added by Obamacare.
There can be such a thing as too much job growth in one sector, and that is surely the case for health services today. Obamacare didn’t create productivemedical jobs, it created bureaucratic institutional bloat.
Workers and businesses outside the health care bureaucracy have been paying the price of Obamacare’s rules, regulations and mandates with sluggish job andwage growth.
The Affordable CareActwas not a jobs bill. Hospitals do not need Obamacare to maintain steady employment.
The rest of us, however, need Obamacare repealed so the rest of the economy can add jobs at a more normal pace.