Monday, February 17, 2014


Much has been made of the Congressional Budget Office report that Obamacare may encourage people to quit their jobs.  This is of concern because it may reduce productivity, and Republicans are quite sure that those who quit their jobs will take up reclining on the sofa, eating bon bons, and watching Judge Judy on TV.  Now it is possible that some who quit their jobs will do just that.  But many more people will find something to do that they enjoy more.  One woman quit her job and takes full-time care of her granddaughter so that her daughter, a single mother, can work.  Now anyone who has ever done so knows that taking full-time care of a young child is much more difficult than reclining on the sofa.  It's even more difficult than paid employment.

Now most people won't quit their jobs for the health insurance subsidy. High-wage workers, for instance, don't receive any subsidy.  Many of them also have employer-paid insurance as well.  So we needn't worry that doctors, lawyers and accountants will suddenly decide that a life of leisure is preferable to work.  Single people, with or without children, are unlikely to quit their jobs, although some of them may go from full- to part-time work, depending on how the subsidy works for them.

Who will quit their jobs or reduce their hours?

--Working poor couples with young children, where the partner who works for health insurance makes less than it costs for childcare, or the couple has to stagger their work hours and they don't see each other awake for days at a time.

--Older couples without health insurance, where the cost outside of subsidy is prohibitive.  Also older singles may cut their work hours to remain within subsidy for the same reason.

--People who hate their jobs and decide that they don't have to stay because the job provides health benefits.

What's interesting about all these groups is that they are generally regarded as part of the less productive hoi  polloi, those who make lower wages because they are less productive than the doctors, lawyers and others whose productivity justifies their high wages. Indeed one would think that it might be good, if they are so unproductive, for them to quit their jobs.  We'd have less traffic, less air pollution and such, so the productivity loss might be offset by environmental and other savings. Some people who quit might work at the local food bank, senior center, or other worthy endeavor.  Others might take up art projects that we might view as unfortunate.

But might it be that they are underpaid rather than unproductive, that the loss of productivity might cost more to the overall economy than the loss of an equivalent number of, say, bankers?  If that's true, there's a simple solution--a pay raise.

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