CBO: Obamacare will mean fewer workers

Workers will choose to work fewer hours due to the Affordable Care Act, according to a report by the non-partisan Congressional Budget Office. Republicans jump on the report as evidence of the health law's shortcomings.

Posted 11:20 p.m. Feb 4, 2014 — Updated 11:50 p.m. Feb 4, 2014

RALEIGH, N.C. — Workers will spend fewer hours on the job over the next decade as a result of the Affordable Care Act, according to a forecast by the nonpartisan Congressional Budget Office. The impact will be the equivalent of 2 million fewer full time workers on the job as of 2017.

"The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024. Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA," reads the report.

The analysis of labor market effects of the ACA, what some call "Obamacare," begins on page 123 of a forecast of overall economic growth delivered to Congress Tuesday. It does not say the economy will shrink as a result of the health care law. Rather, it says the number of hours worked will grow more slowly than otherwise would have been the case.

The report says that much of slower growth will be chalked up to people opting not to work once they have health care rather than employers choosing not to hire. Many of the people opting out of the workforce, or opting to work fewer hours, will be low wage workers, according to the forecast.

"CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, 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," the report says. "Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation ... and the impact on the overall economy will be proportionally smaller than the reduction in hours worked."

Republicans jumped on the report as evidence that the Affordable Care Act would hurt the economy.

"Obamacare will destroy millions of jobs, increase the deficit and harm small businesses and hard-working families, and yet (U.S. Sen.) Kay Hagan says she would still vote for it again," North Carolina Republican Party spokesman Daniel Keylin said.

The White House defended the law. Jay Carney, press secretary for President Barack Obama, emphasized the report did not predict employers would create fewer jobs.

"Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the CBO report. CBO’s findings are not driven by an assumption that ACA will lead employers to eliminate jobs or reduce hours. In fact, the report itself says that there is 'no compelling evidence that part-time employment has increased as a result of the ACA,'" Carney said in a news release.

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