Paul Krugman: No, millions of Americans won’t lose their jobs because of Obamacare

The New York Times columnist takes on "the latest falsehood in the ever-mendacious campaign against health reform"

Published February 7, 2014 2:23PM (EST)

Paul Krugman                                                                                                                                                                     (Reuters/Brendan Mcdermid)
Paul Krugman (Reuters/Brendan Mcdermid)

Paul Krugman's Friday column in the New York Times takes on "the latest falsehood in the ever-mendacious campaign against health reform."

This time, he says, it's the dishonesty (or willful ignorance) of politicians like House Majority Leader Eric Cantor who are grossly misrepresenting findings from the Congressional Budget Office on the fiscal and economic effects of the Affordable Care Act.

The report appendix on the Affordable Care Act predicts that first-year enrollment in the health exchanges will fall "only modestly short of expectations," and that uninsured Americans are getting insurance at basically the rate predicted last spring. But this isn't the part being lied about by Republicans like Cantor -- they're just ignoring it entirely because it doesn't mesh well with their vision of Obamacare as an apocalyptic failure.

The real dishonesty from Cantor and others, Krugman says, is how they are talking about Obamacare's impact on the labor supply.

"It has always been clear that health reform will induce some Americans to work less," he explains. "Some people will, for example, retire earlier because they no longer need to keep working to keep their health insurance. Others will reduce their hours to spend more time with their children because insurance is no longer contingent on holding a full-time job. More subtly, the incentive to work will be somewhat reduced by health insurance subsidies that fall as your income rises.

"The budget office has now increased its estimate of the size of these effects," he continues. "It believes that health reform will reduce the number of hours worked in the economy by between 1.5 percent and 2 percent, which it unhelpfully noted 'represents a decline in the number of full-time-equivalent workers of about 2.0 million.'”

Cantor seized on the data about voluntary job reduction -- retirement, parents opting to work part-time, etc. -- and twisted it into a data point about involuntary job loss. “Under Obamacare, millions of hardworking Americans will lose their jobs and those who keep them will see their hours and wages reduced,” Cantor tweeted about the budget report.

This simply isn't true, and Cantor should know that, as Krugman explains:

The budget office report didn’t say that people will lose their jobs It declared explicitly that the predicted fall in hours worked will come “almost entirely because workers will choose to supply less labor” (emphasis added). And as we’ve already seen, Mr. Elmendorf did his best the next day to explain that voluntary reductions in work hours are nothing like involuntary job loss. Oh, and because labor supply will be reduced, wages will go up, not down.

We should add that the budget office believes that health reform will actually reduce unemployment over the next few years. [...]

So was Mr. Cantor being dishonest? Or was he just ignorant of the policy basics and unwilling to actually read the report before trumpeting his misrepresentation of what it said? It doesn’t matter — because even if it was ignorance, it was willful ignorance. Remember, the campaign against health reform has, at every stage, grabbed hold of any and every argument it could find against insuring the uninsured, with truth and logic never entering into the matter.

Read the full column here.


By Katie McDonough

Katie McDonough is Salon's politics writer, focusing on gender, sexuality and reproductive justice. Follow her on Twitter @kmcdonovgh or email her at kmcdonough@salon.com.

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Aca Affordable Care Act Eric Cantor Krugmania Paul Krugman Unemployment