Health care reform's job impact uncertain

Steve Hine
Steve Hine, Minnesota's chief labor market analyst with the Department of Employment and Economic Development.
MPR Photo/Elizabeth Stawicki

The idea that a federal law will eliminate jobs is particularly troublesome at a time when the nation struggles to climb out of a recession and millions are out of work.

The federal health care legislation's name is unwieldy -- the Patient Protection and Affordable Care Act. Some just call it by its initials, PPACA.

On the other hand, opponents of the health care law have called the health care overhaul a "job-killing" law.

Republicans in the U.S. House, including 2nd District U.S. Rep. John Kline put out a report in January that said the law will cause significant job losses. Kline could not be reached for comment on this story.

But the GOP cites in its report a study by the non-partisan Congressional Budget Office. The CBO estimates the law would reduce the amount of labor used in the economy by about 650,000 jobs.

But FactCheck.org, a project of the Annenberg Public Policy Center of the University of Pennsylvania, says that's not the whole story.

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FactCheck.org's Lori Robertson says the House Republicans' interpretation omits the CBO's conclusion that the health law will reduce the amount of available workers, not necessarily jobs.

"You'll quickly see that they quoted half of the sentence from CBO and kind of left the other part out," she said, "Primarily there would be less labor because many people would choose to work less or retire early."

Robertson said these are mostly people who work now for the health insurance, not necessarily the paycheck. Because the law will make it easier to get insurance without a job, some people might choose to reduce their hours from full-time or opt out of the labor market entirely.

Overall, the CBO says the net effect on the job market is likely to be small.

And the CBO is not alone.

"We have fairly detailed projections of jobs by industry and occupation that include health care and at least attempted to try to handicap the next 10 years based on changes in the health care law, said Anthony Carnevale, who directs the Georgetown University Center on Education and the Workforce. "Although I must say we didn't find much effect. "

Carnevale has received appointments from both Republican and Democratic presidents, and has worked for both unions and business groups.

He said baby boomers will need a lot of health care in the next few years, and those changing demographics mean health care will be an even more dominant job creator. Carnevale said health care is distinctive in that the career ladders begin at fairly low levels and run up very high.

"It is an industry where entry level requires no more than a year or so of post-secondary training. It is an industry where if you can get to a Ph.D. or an M.D. you can climb to the top of the mountain and make a great deal of money," he said. "There is no industry with that kind of extensive career laddering."

As for Minnesota, it hasn't done any specific research on the health care law's effect on the state's job market. But the state's chief labor market analyst, Steve Hine, said the law could get the economy moving by freeing people to switch jobs or start a business.

"To go into self employment is very difficult when you're having to leave a health care package that your employer provides," he said.

Hine said that so-called "job lock" weighs on the economy. If the health overhaul reduces job lock, it could fuel economic growth to create jobs.

The problem with predicting the effect of the health law is that so much is uncertain. The law has many blanks yet to be filled in, and as the CBO puts it, "the law may shape the labor market or the operations of other segments of the economy in ways that are difficult to anticipate or quantify."