The Washington PostDemocracy Dies in Darkness

Yet another inconvenient truth for its opponents: Obamacare is not ‘killing jobs’

Source: BLS

Within last week’s strong jobs report was yet another good month for the health-care sector, which added 45,000 jobs. The growth of jobs in this sector is a long-term trend, driven in no small part by our aging demographics. Even when we were hemorrhaging jobs in the depths of the last recession, health care was an outlier, never experiencing even one negative month of job growth during the downturn.

A few months ago, one of us (Bernstein) noted that the effectiveness of the Affordable Care Act in reducing the number of uninsured was an inconvenient truth for Obamacare’s opponents. Well, here’s another such truth: Anyone who wants to call the ACA a “job killer” is either ignorant of or not interested in the facts.

The figure above shows that since the subsidized premium exchanges and Medicaid expansions in 24 states (plus D.C.) came online last year (five other states later followed suit), monthly job growth in the health-care sector has risen sharply. (The monthly changes are jumpy, so we plotted the trend through the data.)

Strong health-care employment growth shouldn’t surprise anyone. Demand for labor is derived from the demand for the goods and services that people want and need. Thus, we’d expect the expansion of health coverage to boost jobs in that sector — in addition to driving historically large reductions in the number of Americans without health coverage, saving states money and slowing growth in health-care costs.

Yet House Republicans are still trying to repeal parts of the law, claiming that “many of the key elements of Obamacare [are] harming individuals and families [and] hurting job creation.” Fox News commentator Bill O’Reilly maintains that, “While some of the poor benefit, other Americans are punished because the job market is smaller.” Some presidential candidates agree: Jeb Bush calls the ACA “the president’s job-destroying health-care law” and Ted Cruz’s Senate Web site asserts that “Obamacare is causing millions to lose their jobs.” Cruz and Marco Rubio aren’t even content to repeal parts of the law — they want to repeal the entire thing.

Even if we’re generous here and assume that those shouting “job killer” mean that the gains in the health-care sector are coming at the expense of the rest of the job market, there’s no evidence to support that claim, either.

A good state-level measure of Obamacare’s penetration — capturing the effect of both the Medicaid expansion and the exchanges — is the increase in the rates of those with health coverage in the state. In the graph below, we plot employment growth by state (in 2014) against this change. The job-killers would predict a negative correlation — if they’re correct, states with the biggest gains in insured rates should have seen slower job growth. Instead, the opposite is true. The positive slope in the “best-fit” line through the dots in the scatterplot means that states with bigger health-coverage gains had stronger job growth. (The correlation is still positive, though barely so, if we remove gains in employer-sponsored insurance from the health-care side of the equation.)

For example, the red dot near the upper right-hand part of the figure represents California. The insured rate there grew by 4.8 percentage points between 2013 and 2014 while employment growth during the same period was just over 3 percent (the national average for job growth in 2014 was 1.9 percent). The other red dot in the bottom left-hand section of the graph represents Maine, where the insured rate grew by just over 1 percentage point and employment grew by less than half a percent.

To be clear, we do not put much weight on that positive slope — we’re not saying the ACA is a job creator economy-wide (though the first figure suggests that it may be creating jobs in the health sector). Job creation in a large, global economy such as ours involves many moving parts, and, as we’ve argued before, the ACA is unlikely to have a significant effect on employment. But the data are telling us something important here: There’s no case that the ACA is a job killer.

Nor is there any evidence that Obamacare is causing a shift from full-time to part-time jobs — the number of involuntary part-time workers is actually down since 2013 (and as Dean Baker notes, the evidence that the ACA’s premium subsidies may be encouraging voluntary part-time work is a good thing), while full-time employment has been steadily rising. Again, steady job growth is surely a function of the broad employment recovery, not health reform, but it is yet another trend going the wrong way for the critics.

The ACA isn’t perfect, but it is, as intended, covering more of the uninsured and slowing cost growth. And it is doing so without hurting the job market.

That’s a tough reality for those who have argued otherwise for years now, but reality it is. We can’t stop the ACA’s opponents — including those running for president — from denying it, but we (and, more importantly, the press that covers them) must confront them with the facts every time they get those facts wrong.