2.5 Million Jobs Lost Due to Health Care Reform

Post Date: 2/10/14
Last Updated: 2/18/14


Cross References
- The Budget and Economic Outlook: 2014 to 2024, Congressional Budget Office
- www.cbo.gov

The Congressional Budget Office (CBO) has issued a report claiming the number of full-time-equivalent jobs will be reduced by 2.5 million over the next 10 years as a result of the Health Care Reform Act of 2010. The CBO is a nonpartisan agency within the legislative branch of the U.S. government that provides economic data to Congress. The report says the total number of hours worked will decrease by about 1.5% to 2% during the period from 2017 to 2024. This reduction in hours work will result in a loss in the number of full-time-equivalent workers. The reduction of hours is due 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. Although CBO projects that total employment and compensation will increase over the next decade, that increase will be smaller than it would have been in the absence of the Health Care Reform Act.

The report explains that the availability of health insurance subsidies will reduce incentives to work. As health insurance subsidies decline with rising income and increase as income falls, work becomes less attractive. As a result, some people will choose not to work or will work less. These subsidies increase available resources with the effect of giving people greater income, thereby allowing some people to maintain the same standard of living while working less.
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