A Congressional Budget Office report says that the Affordable Care Act will result in the loss of 2.3 million full-time equivalent workers by 2021. That has foes of the health care law complaining that Obamacare is creating a disincentive to work.
There’s some truth to that. But there’s another way to look at it: The law may create an incentive for corporate America to pay their workers a decent wage and treat them with respect.
One of the most profound effects of the painful recession and almost equally painfully slow recovery is that it fundamentally changed the relationship between employers and employees – perhaps even more than the decline of labor union membership. When unemployment hit double digits, out-of-work Americans understandably panicked, with many taking jobs that paid a lot less and had awful (if any) benefits.
Now that unemployment has dropped to 6.7 percent, the lowest rate since 2008, one would think the power dynamic would change, giving workers and job-seekers more leverage. But the template has already been firmly set from the long era of very high unemployment, and corporate America – which, after all, is in business to make money – is determined to hang onto the give-backs it won during the recession. And there is still a sense that somehow people should be grateful for a job, any job, no matter how underpaid it may be or how awful the work environment is.
The Affordable Care Act changes that dynamic substantially, and that’s what the CBO numbers reflect. The report was clear in saying that the job "losses" were not going to be the result of companies laying people off to avoid paying for health care. They will be because people will reduce their hours or quit jobs because they won’t need to stay in them for health insurance.
It’s similar to the impact of no-fault divorce. Yes, making it easy for people to divorce might well be a disincentive for people to try a little harder to work on their relationship, even where children are involved. And that’s a shame. But it also means people don’t have to stay in a marriage where there is abuse or utter lovelessness, simply because they feel trapped in a bad situation.
Americans work hard, for the most part, and they have not been consistently compensated for it. Productivity increased 80.4 percent from 1973 to 2011, while wages (for all workers, ranging from CEOs to minimum-wage workers) increased 39.2 percent during that time, according to the Economic Policy Institute. If the minimum wage had kept pace with productivity gains, it would now be more than $18 an hour, the institute calculates.
So why would people stay in jobs they hate or for which they are poorly compensated? If the market is really at work, then employers would be pressured to pay people more and treat them better to keep a stable and high-performing workforce. High unemployment tips more control to the employers (or “job creators,” as some people like to call them). But health insurance was also a big part of it. People indeed stayed in jobs only because they needed the health insurance – either because they couldn’t afford it on their own, or because a so-called “pre-existing condition” would have made it impossible to get insured elsewhere.
The ACA takes that power away from corporate America. Will it mean that people may try to get by on public assistance and subsidized health care instead of being productive members of society? Unfortunately, that may well be the case. But it also means that people who are in two-income marriages but may want to work part-time to care for children or an ailing parent will be able to do so. And it means that hopeful entrepreneurs – the people who make American business what it is and should be, who are innovate and creative – can take the risk to start their own businesses, knowing they won’t be tied to a dead-end job because of their need for health insurance.
What’s a business to do? They could compete to attract good workers by making themselves better places to work. And it’s not just about salary; it’s about treating employees with respect and consideration, and making them feel part of the team. When Buffalonians such as myself head back to the Queen City, we tend to make a trip to Wegmans part of our hometown tour. We love Wegmans, and so do the people who work there. The grocery store is consistently listed among the top places to work, and it’s because they offer flexible scheduling, promote heavily from within and even offer college scholarships to the young people who work there. There’s an employee wellness program, and the company brings in serious chefs to create menus in the prepared foods department. They have a child-care room inside the store for shoppers, so you can drop off the kids to play while you get your groceries.
These are not just nice things to do; they're good business. When people are treated well, they will be more productive and stay in the job, meaning the company won’t have to go to the expense of training new hires. And well-treated workers are happy workers. One of the reasons Wegmans is such a great place to shop is that the people who work there are friendly and helpful.
Obamacare was always going to be disruptive in ways that go far beyond the simple delivery of health care. That can be a difficult adjustment. But it can also be very liberating, and can increase competition across the board. Job-seekers have long competed against each other for work. Now, companies can compete for good workers.