Free Market Family Values

[paft.livejournal.com]

Stuart Varney: Why don’t you just spend more time with the family, let somebody else work, you go on Obamacare… Stay home, spend more time with the family, let somebody else pay for your healthcare…


It began as the usual Obamacare Horror Story “Bombshell” going pfffffft. We’ve seen it happen, over and over again. A supposedly dire effect of the Affordable Care Act gets cited, which, on examination, turns out to involve someone who could easily afford it paying a higher premium or (in the case of “Bette,” cited during a Republican response to the SOTU) someone who’s been “victimized” by her own refusal to use the options offered by the ACA.

The latest involves the release of the Congressional Budget Office’s report on the impact of the ACA. “Law will reduce fulltime employment by about 2 million,” it was announced. “Healthcare Law will reduce hours worked by about 1.5% to 2% from 2017-2024”

“You wonder how they explain it,” exclaimed a Fox Anchor.

Wouldn’t you know it, CBO director Doug Elmendorf went and spoiled everything by explaining it. See, it’s not so much a matter of jobs being eliminated. It’s a matter of many workers now having the option of reducing their hours or, if they have enough savings, retiring completely from the workforce. As the report says (emphasis added),

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 what’s the next step on the right? Act outraged that many workers will actually be in a position to, not just leave jobs they dislike for jobs they prefer, but also cut back on their work hours so they can spend more time with their (get this) families.



Or worse yet, if they’ve got enough in savings, retire!

Jon Stewart puts it beautifully in his reaction in Varney’s comments, “What the Hell? You’re conservatives. I thought you guys loved the family.”…’The family must be protected from asteroids, nuclear weapons, dudes in love, they have to be protected!’”

Some of you may remember last autumn a thread on retail workers being made to work on Thanksgiving (or, as one sniveling coward of a retailer put it in its ads, “Thursday.”) Stewart remembers the issue too.

“Now that I think about it,” he observes, “When family clashes with capitalism around the holidays, conservatives throw family overboard.”

Yes, yes, I remember the arguments I encountered here. Giving an employee paid time off on that day is a dire restriction of their freedom. Demanding they come in to work on a major holiday isn’t going to seriously crimp any plans. Nobody books air tickets months in advance and endures long security lines and packed planes for the sake of traveling to see the folks on that day. And requiring someone to man the toy department on Thanksgiving Day is just the same as asking emergency and health workers, airline and telecom employees and other vital transportation and communication personnel to work on that day.

Which left me with the spooky sense the Internet is not just a revolutionary means of communication that spans the globe. It may very well enable us to interact with the inhabitants of some parallel universe where airports are all but empty in late November through December and retail workers are clamoring for the chance to work on what, (in this universe,) is a wildly popular, family oriented holiday.

I kid, of course. The people making these bizarre arguments are, in fact, inhabitants of our world, who, for the sake of defending the indefensible, are willing to feign a complete disconnection from reality. But the more I listen to free market conservatives, the more it sounds as though they believe only upper management should reproduce. In the minds of these folks, people making below a certain amount have no business bearing children or keeping in touch with aging relatives or siblings.

Apparently, a JOB is not a way for people to support themselves and their dependents while contributing to either the private or public sector. If it pays so little and takes up so much time that there is nothing left for friends and family, workers shouldn’t complain. They should just be glad they have a JOB.

A JOB after all, is a quasi-religious requirement, which establishes a firm caste system (see the arguments about whether someone who digs ditches 40 hours a week “deserves” a living wage) and trumps any other personal tie or obligation.

*

Comments

[mylaptopisevil.livejournal.com]

I didn't actually do math.

Wouldn't you need math in order to show that there is a point where you make less money due to having to pay for insurance without subsidies?

[cheezyfish.livejournal.com]

CBO did the math. I just demonstrated the concept.

[mylaptopisevil.livejournal.com]

CBO did math showing that people will not take higher paying jobs to avoid having to pay for insurance subsidies, because the pay increase won't make up for the subsidy removal?

Could you point me to the part of the CBO report that says that?

I just demonstrated the concept.

Saying something could happen doesn't mean it will happen, similar to how saying that a CBO report shows people won't work in order to keep subsidies doesn't mean that happened, either.

[cheezyfish.livejournal.com]

Pg. 118-119 (Effects of the ACA on the Supply of Labor) of the CBO report: You should read all of pg.119 and most of 120. For your convenience, some highlights;

In CBO’s view, the ACA’s effects on labor supply will stem mainly from
the following provisions, roughly in order of importance:
The subsidies for health insurance purchased through
exchanges;
 The expansion of eligibility for Medicaid;
 The penalties on employers that decline to offer
insurance; and
 The new taxes imposed on labor income.

....

CBO’s estimate of the impact that the subsidies will have
on labor supply has three components: the magnitude of
the incentive, the number and types of people affected,
and the degree of responsiveness to the incentive among
those who are affected.

The Magnitude of the Incentive to Reduce Labor Supply.
For some people, the availability of exchange subsidies
under the ACA will reduce incentives to work both
through a substitution effect and through an income
effect. The former arises because subsidies decline with
rising income (and increase as income falls), thus making
work less attractive. As a result, some people will choose
not to work or will work less—thus substituting other
activities for work. The income effect arises because
subsidies increase available resources—similar to giving
people greater income—thereby allowing some people to
maintain the same standard of living while working less.
The magnitude of the incentive to reduce labor supply
thus depends on the size of the subsidies and the rate at
which they are phased out.


....

Correspondingly, the negative effects of exchange subsidies
on incentives to work will be relevant primarily for a
limited segment of the population—mostly people who
have no offer of employment-based coverage and whose
income is either below or near 400 percent of the FPL.

(not to mention, the head of the CBO pretty much said what I said about the this matter)


Saying something could happen doesn't mean it will happen, similar to how saying that a CBO report shows people won't work in order to keep subsidies doesn't mean that happened, either.

Of course the CBO report does say that, however, I can agree that they have based their estimates on a number of assumptions, all of which or none of which may turn out to be true. That is the nature of an estimate.

[mylaptopisevil.livejournal.com]

(not to mention, the head of the CBO pretty much said what I said about the this matter)

The portion you highlighted doesn't say they're not going to want better paying jobs in order to keep subsidies, it says they won't take/keep multiple low wage jobs because they need the money for medical reasons.

Oh no, someone won't take a second job at McDonals because grandma's Medicaid was expanded to fully pay for her heart pills (also Grandma can actually retire now).

[cheezyfish.livejournal.com]

it says they won't take/keep multiple low wage jobs because they need the money for medical reasons.

It makes no distinction of what kind of jobs people will choose to work less at, however the report does mention that a segment of the work force will choose to leave their full-time jobs with employment based insurance and instead work a part-time job without employment insurance (you know like a job at McDonalds) so they can become eligible for subsidies. They based their methodology on similar methods used to determine the effect of labor supply from direct taxes, however tax rates have opposite forcing on labor supply with income and substitution effects, while the ACA has a negative effect on the supply of labor for both the income and substitution effects (this essentially means that people can keep their same standard of living by working less through subsidies).

[mylaptopisevil.livejournal.com]

the ACA has a negative effect on the supply of labor

Only if you view labor as working for someone else instead of yourself.

[cheezyfish.livejournal.com]

Why don't we stick with the CBO's definition of supply of labor.

[mylaptopisevil.livejournal.com]

So how does the CBO define labor supply.

[cheezyfish.livejournal.com]

Simply as the amount of hours of labor available (the size of the workforce).

[mylaptopisevil.livejournal.com]

So if someone goes from working two jobs a day (let's say 12-16 hours a day) to one job a day (let's say 8 hours a day), that counts as that individual creating a loss in labor supply. But is it reasonable to expect people to work two jobs for medical care?

Does the CBO take into account that the second job someone will leave will still exist, and that someone who is unemployed can then provide work hours toward it?

[cheezyfish.livejournal.com]

So if someone goes from working two jobs a day (let's say 12-16 hours a day) to one job a day (let's say 8 hours a day), that counts as that individual creating a loss in labor supply. But is it reasonable to expect people to work two jobs for medical care?

The CBO doesn't differentiate. So some certainly would be in that position. That doesn't mean they all will. The question is, whats the balance. Everyone wants to help hardworking families struggling, but every time you provide a way to work less and still provide the same standard of living, you are going to have people abuse it.

Does the CBO take into account that the second job someone will leave will still exist, and that someone who is unemployed can then provide work hours toward it?

Yes, they do. However, if you tell everyone to work 10% less and the government will subsidize their time off, you could probably eliminate unemployment, but the government doesn't have infinitely deep pockets. Economist generally think people working less is a bad indicator.

[mylaptopisevil.livejournal.com]

The CBO doesn't differentiate.

Should they? Because there's a huge difference between "someone is barely working anymore look at how healthcare made them lazy" and "someone can work normally now look at how healthcare made their work/life balance stable/sane"

However, if you tell everyone to work 10% less and the government will subsidize their time off

Except that's not what is happening.

Economist generally think people working less is a bad indicator.

And yet no one is asking for a 24 hour workday.

[cheezyfish.livejournal.com]

Actually I misread what you wrote. The CBO unequivocally does not say "they won't take/keep multiple low wage jobs because they need the money for medical reasons." This is so wrong it is unbelievable that you think it says this.
.

[mylaptopisevil.livejournal.com]

That's okay; it doesn't say people won't take better paying jobs (or stop working full time) because of subsidies, either.

What they'll stop doing is trying to juggle multiple low income jobs because they're getting relief in one of the ways they were struggling to make ends meet. Or someone who can retire will now actually retire because their medicaid actually pays for their medical care.

[cheezyfish.livejournal.com]

it doesn't say people won't take better paying jobs (or stop working full time) because of subsidies, either.

That's precisely what it says. Unless you have some funky definition of "better paying," the CBO claims that some people will work less in order to make less money, so they can qualify for more subsidies. That's the key. You can sugarcoat it all you want, but people are going to work less in order to get more money from the government.

What they'll stop doing is trying to juggle multiple low income jobs because ...

Some will, I'm sure. But that still qualifies as making less money so they can get more subsidies from the government.

Or someone who can retire will now actually retire because their medicaid actually pays for their medical care.

You mean someone who can't retire, now can, because they are getting subsidies (or medicaid). What the CBO is not taking into account, which you seem to think it is, is the effect of having more access to health insurance outside of employment based insurance.

[mylaptopisevil.livejournal.com]

CBO claims that some people will work less in order to make less money, so they can qualify for more subsidies.

I'd love to see the math that shows at what point/range someone will go "no no, I'm good with money, because I don't want to lose my subsidy."

You mean someone who can't retire, now can, because they are getting subsidies (or medicaid).

ACA is more than just a subsidy. It expanded medicaid, as well. But, sure, they get subsidies and/or medicaid, whatever makes you happy.

What the CBO is not taking into account, which you seem to think it is, is the effect of having more access to health insurance outside of employment based insurance.

What makes you believe they don't take that into account? Why wouldn't they take that into account when doing a study about the effects of insurance access and the job market?

[cheezyfish.livejournal.com]

I'd love to see the math that shows at what point/range someone will go "no no, I'm good with money, because I don't want to lose my subsidy."

This isn't some new concept. Progressive tax structures have similar effects. The more hours you work, the less you take home in pay per hour worked. So if you work 40 hrs a week and make 80k, you bring home 60k after taxes. Now if you work 60 hrs a week and make 120k, you might only bring home 80k after taxes, meaning those 20 hrs of work make less income per hour than the first 40, so a person may not decide to work those hours. However, they lower their standard of living by working less. With the ACA's subsidies the CBO views them in terms of an implicit tax for analysis purposes, largely because there are well researched methods for doing so. If you make say, over 30 k a year, the loss in subsidies over making 25k a year is viewed as a tax. Now the difference being, when you make 25k a year, that income loss is getting replaced with a subsidy so there is less of a loss in standard of living or maybe even a gain. As opposed to direct taxes, we may see an actual rise in standard of living in exchange for working less hours. So, the actual magnitude of this effect is largely based on the estimates of the cost of insurance, as we still don't know the actual premiums rates that the exchange will level off at (that would require we know the numbers and demographics of who will sign up). So the CBO, their analysis depends heavily on estimates. We can come up with numbers all we want but we won't match the CBO analysis as they have been making these estimates for years and additionally, have been cited repeatedly by proponents of the ACA for those estimates.

. It expanded medicaid, as well. But, sure, they get subsidies and/or medicaid,

The expansion of medicaid is estimated by the CBO to have a small impact on the supply of labor. While many may retire or work less to qualify, many others will use the extra income cap to work more, and additionally, some of those may choose to make more and simply qualify for subsidies and get insurance through the exchange.

What makes you believe they don't take that into account?

Because I read the report (or at least the supply of labor section). But really, I think it is a much harder thing to quantify, and such an impact is likely to be much less compared to subsidies.

[kylinrouge.livejournal.com]

This isn't some new concept. Progressive tax structures have similar effects.

No, they don't.

Progressive tax structures only have a tax increase on every dollar made in the new bracket only, as in they pay the same taxes for their income up to that point. It's not a flat increase across the board. Only an idiot would consider not taking a raise because it puts them in a higher income tax bracket.

[cheezyfish.livejournal.com]

Holy crap, yes they do. Here you are saying the CBO is wrong again.

[kylinrouge.livejournal.com]

No I'm not. Please cite the relevant portion of the CBO that disproves how progressive tax structures work.

[cheezyfish.livejournal.com]

Also, I'm clearly talking about a marginal tax structure.

So if you work 40 hrs a week and make 80k, you bring home 60k after taxes. Now if you work 60 hrs a week and make 120k, you might only bring home 80k after taxes, meaning those 20 hrs of work make less income per hour than the first 40

[kylinrouge.livejournal.com]

...So? You make less per hour on all income past $10,000. Surprisingly this hasn't stopped anyone from working more hours.

I mean, in your example the 80k is at a 20% rate, and assuming the new bracket starts at 80k, the next 40k is at a 50% rate. In reality, using these numbers it jumps from 25% to 28%.

[mylaptopisevil.livejournal.com]

This isn't some new concept. Progressive tax structures have similar effects. The more hours you work, the less you take home in pay per hour worked.

...

Now if you work 60 hrs a week and make 120k, you might only bring home 80k after taxes, meaning those 20 hrs of work make less income per hour than the first 40, so a person may not decide to work those hours

I'd love to meet the person who turns down a 120k job because of the tax bump applied to the extra $40k

[cheezyfish.livejournal.com]

That is the entire idea! You are still gaining in terms of the standard of living. The fact that you are bringing home a smaller % of your paycheck due to taxes even though you are working harder, is offset by the increase in your standard of living. But what if that tax rate was 80% or 90% on that higher income? Then less people would choose the harder and longer hours for that extra income, because your standard of living wouldn't be increasing as much.