In defense of not working

You might have heard Republicans claiming last week that 2.5 million Americans would lose their jobs as a result of ObamaCare. This claim was based on a Congressional Budget Office report on ObamaCare. The report suggested that the U.S. workforce might shrink by 2.5 million people as a result of ObamaCare.

This distinction is critical: The CBO didn't predict that people would lose their jobs, but rather, that more people would choose to work fewer hours, since they might no longer put in a ton of time at work simply to get health insurance through their employer.

While there are plenty of serious philosophical reasons to lament this aspect of ObamaCare (the people choosing not to work as much are being subsidized by the taxes of folks who do work), as the Washington Examiner's Tim Carney argues, there may be a silver lining for some Americans:

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Now, maybe the benefits of this policy outcome won't outweigh the costs. That's a fair argument. But let's not pretend the benefits don't exist. As Carney hinted, there are some conservative, aspirational elements to this, including a family values argument about allowing moms to stay home with their children. There's an entrepreneurial argument as well.

The irony, of course is that ObamaCare is essentially fixing a problem that liberal policies (wage controls and distortions in the tax system that coupled employment with health insurance) created in the first place.

I have long opposed ObamaCare for a variety of reasons. Of course, that doesn't mean that every aspect of it will be pernicious. But instead of acknowledging any possible salutary outcomes, my fellow conservatives have generally assumed the worst — that people would take advantage of this to sit on the couch and play video games. The truth is that a lot of hardworking Americans might actually benefit from this one component of a bad law.

Conservatives believe that work is a good thing, and, indeed, we cannot disconnect the spiritual and psychological benefits of a good day's work from our policies. Sitting around the house won't give you fulfillment or happiness that you get from accomplishing a goal. But guess what? Neither will working a horrible job.

This quote, from Studs Terkel's book Working might help us remember:

There is also an argument here about increasing mobility. The American dream is about your children having opportunities you didn't. I'm a product of that.

Just as I don't want men and women to be servants of the state, putting them in thrall to their employer for the sake of health insurance isn't my idea of a good society idea, either. Ideally, we would have a free-agent nation where more Americans are afforded the opportunity to pursue their dreams and exploit their God-given talents.

My guess is that at least some of the people who are now able to work less without losing their employer-sponsored health care will go on to do much bigger and better things than they would have by just continuing to grind out 40-plus hours a week in a job they didn't like. Some, I suspect, will invent things and create jobs that wouldn't have otherwise existed.

That's not to say this CBO report was full of wonderful news. Just as there may be some surprising salutary benefits from ObamaCare, there are still some horrible perverse incentives.

This may be an opportunity for some people to better themselves, but, for others, ObamaCare will be a rational reason to turn down opportunities for growth and advancement. I recently spoke with AEI Resident Scholar Michael R. Strain. And while he generally agreed with Carney about people who were working solely for health insurance, he also had this warning:

"The real problem is not people who are working only for health insurance no longer have to work because now they have health insurance. The problem is that as the subsidies for ObamaCare phase out, you're imposing implicit marginal tax rates that are very high. So if you make an extra $1,000 — and you lose your subsidy — that's a big cost. And that's a big disincentive not to make that extra $1,000. And what that's going to do is to put extra pressure on people not to advance in their careers, not to work full time, and to kind of stay where they are. And that, I think, is a very serious flaw in ObamaCare."

(You can listen to our full conversation here or download the podcast on iTunes.)

This whole debate is more nuanced than either side would care to admit. On one hand, we have a system that is freeing people from having to work simply in order to obtain health insurance. On the other hand, we are creating a disincentive for people to better themselves. Conservative reformers hoping to replace ObamaCare would do well to try to enhance the former and diminish the latter. That means disconnecting health insurance from employment, creating a free-agent nation where people can own and manage their own health insurance, and fostering an environment where hard work pays off.