“Obamacare will cost 2.5 million jobs … 27,000 Iowa jobs”
–headline in new campaign ad for Mark Jacobs, GOP Senate candidate
“The Congressional Budget Office concluded that because of Obamacare, we are going to have 2½ million less people working.”
— Jacobs, speaking in the same ad.
Mark Jacobs is a wealthy businessman seeking the Republican nomination for an open U.S. Senate seat in Iowa. He had a healthy lead, but state senator Joni Ernst has caught fire with some provocative ads, including one when she literally shoots a gun as the ad promises she will “unload” on Obamacare.
Jacobs’ sober ad on CBO’s findings doesn’t pack the same punch. But it’s an interesting case of the ad makers wanting to have their cake and eat it too.
In February, the CBO said the Affordable Care Act, a.k.a. Obamacare, would reduce the number of hours worked by the equivalent of 2.5 million full-time workers by 2025. As we have explained before, that means that workers will decide to reduce their hours, not that employers are reducing the number of jobs.
Moreover, the CBO estimate was a mix of full-time and part-time workers, which result in the hours worked equal to that many full-time workers. But some workers might reduce their weekly hours by only an hour or two, so the impact on overall jobs would be muted.
Here’s how CBO director Douglas W. Elmendorf put it in congressional testimony:
The reason that we don’t use the term “lost jobs” is there’s a critical difference between people who like to work and can’t find a job or have a job that was lost for reasons beyond their control and people who choose not to work.
If somebody comes up to you and says, “Well, the boss said I’m being laid off because we don’t have enough business to pay me,” that person feels bad about that and we sympathize with them having lost their job.
If somebody comes to you and says, “I’ve decided to retire” or “I’ve decided to stay home and spend more time with my family” and “I’ve decided to spend more time doing my hobby,” they don’t feel bad about it, they feel good about it, and we don’t sympathize. We say congratulations. And we don’t say they’ve lost their job because they have chosen to leave that job.
Now look back at what the ad says. Jacobs, when he is speaking, frames it correctly by talking about workers: “The Congressional Budget Office concluded that because of Obamacare, we are going to have 2½ million less people working.”
But the headline as he is speaking gets it completely wrong: “Obamacare will cost 2.5 million jobs … 27,000 Iowa jobs.”
Jacobs further says that although Obama tries to spin the CBO finding “as a good thing, I think that is a bunch of malarkey.” That’s in the realm of personal opinion, beyond the scope of The Fact Checker, but Jacobs is echoing a mainstream conservative critique of the law. There is little dispute that a reduction in the size of the labor force will yield a slightly smaller economy. The question is whether introducing near-universal health care is worth that trade-off, and Democrats do argue that it is a good thing.
The ad headline also cites a state loss figure of 27,000, which stems from an analysis by the Americans for Tax Reform, which is titled “How many Jobs Might Obamacare Cost Your State?” The anti-tax group did a simple calculation, based on how many jobs each state currently has.
But we have previously found fault with the group’s methodology, saying it was inherently misleading. Not every state expanded Medicaid, so the effects are different. (Iowa eventually accepted a modified version of Medicaid expansion.) Every state also has a different distribution of income, so there can be vast differences in the percentage of people who will be affected by the subsidies for low-income workers and the law’s taxes on the wealthy. That could also significantly change the result, state by state.
Moreover, because the estimate of hours is a mix of full-time and part-time work, there is no one-to-one relationship between the reduction in full-time equivalent workers and the fewer jobs that will exist in the economy. In other words, GOP candidates should not be using the ATR study in their campaign ads.
In response, Jacobs campaign spokeswoman Alissa Ohl wrote in an e-mail: “The reality is Obamacare is hurting Iowa families — whether it is through lost jobs, reduced work hours, lost wages, higher employee contributions, or in some cases, the outright cancellation of healthcare plans. It must be repealed and replaced.”
The Pinocchio Test
This ad poses a bit of a conundrum. We had previously said that “cost jobs” ads will earn Three Pinocchios. For non-economists, the use of the phrase “jobs” is especially confusing because it sounds like the decision made by employers, rather than workers.
But Jacobs inoculates himself by actually describing the CBO findings accurately and intelligently. One wonders if he knew that someone was going to slap a misleading headline over this words.
Given that so many Americans mute their TV during campaign ads, we have the sneaky suspicion that the campaign decided a misleading “jobs lost” phrasing would have more impact, no matter how careful the candidate tried to be. So this still qualifies as a Two Pinocchio ad.
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