How the president’s signature law is making life harder for working Americans
When the Bureau of Labor Statistics releases the unemployment number for the month of August this Friday, even an improvement in last month’s 7.4 percent seasonally adjusted rate will leave the number higher than it was during any month of the George W. Bush presidency.
And it’s not just the unemployment number that is grim. That number, after all, gets better when job-seekers get so discouraged that they stop looking for work. The labor force participation rate, which measures the percentage of Americans older than age 16 who are in the work force, is the lowest it has been since the late 1970s.
Why are things so bad?
Sure, there was a financial crisis. But that was five years ago already.
It’s possible to put a good face on the declining labor force participation rate by considering it a positive development that Baby Boomers are enjoying their leisure time in retirement, or that parents are staying home with their children, or that young people are staying in school.
At least some of the people working part-time, though, say they would like to be working full time; in July an estimated 8.2 million Americans were working part-time for economic reasons, the highest number in a year.
Part of the problem is Obamacare. Sure, all the mandates haven’t kicked in yet. But businesses consider the cost of future mandates in making hiring decisions.
The clearest explanation of the effect of Obamacare on employment that I have seen recently comes in a paper by a professor of economics at the University of Chicago, Casey B. Mulligan, recently released by the National Bureau of Economic Research. He writes that the Affordable Care Act, along with other expansions in safety net programs, has created “a massive 17 percent reduction in the reward to working.” As a result, he says, “it is unlikely that labor market activity will return even near to its pre-recession levels as long as the ACA’s work disincentives remain in place.”
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