February 6, 2014

AP’s Initial Report and Subsequent ‘Fact Check’ on Obamacare Employment Impact Have Predictable Errors and Distortions

Ken Shepherd at NewsBusters made reference Tuesday to an Associated Press story headline (“Modest drop in full-time work seen from health law”) indicating that the outfit I prefer to call the Administration’s Press is furiously spinning in reaction to Tuesday’s report from the Congressional Budget Office projecting that Obamacare will reduce full-time-equivalent employment from what it would have been without the law by 2.5 million over the next 10 years.

The underlying content of the story Ken referenced is weak, as is Calvin Woodward’s longer “fact check(“ANTI-OBAMACARE CHORUS IS OFF KEY”) currently carrying an early Thursday time stamp. Woodward’s piece is especially troubling in how it seems to treat work as a curse instead of a necessary component of societal progress. But let’s first look at the full “modest drop” dispatch.

This item is particularly important because, as Ken indirectly indicated, it represents AP readers’ and subscribers’ first look at the CBO-related news and probably had more visibility than subsequent lengthier stories:

Modest drop in full-time work seen from health law

APcboOcareJobsImmedReax020414

The first paragraph is sloppy, and actually misleads in a way that damages the pro-Obamacare camp, because many readers will believe that 2.5 million fewer people will be working 10 years from now than are working today. Oh well. That’s what happens when you assign people who haven’t mastered facts, grammar, and economics to these kinds of stories.

As to the headline’s “modest” claim, let’s reframe it in a way the average person would understand.

If the economy was expected to add about 2 million or so jobs per year for the next decade, but is now going to add a net of 2.5 million fewer regardless of the reason, that’s 250,000 fewer jobs added per year, or a 12.5 percent reduction each and every year for the next decade (250K/2 mil). I daresay that the average person would believe that such a change caused by just one law, if explained this way, is significant, and far from “modest.”

The story’s final claim that the economy has “more than 130 million jobs” is just plain wrong overall. While the economy may have 130 million full-time equivalents, that isn’t what AP asserted. The Household Survey issued every month by the Bureau of Labor Statistics pegged seasonally adjusted total employment, including self-employment, at 144.586 million, while the Establishment Survey of payroll employment showed 136.877 million — still over 5 percent greater than the AP’s rough 130 million number.

Woodward’s “fact check” seemingly came from an Alice in Wonderland perspective in its treatment of employment. People “encouraged” or given the “opportuity” to leave the workforce somehow presumptively became a good thing (bolds are mine):

New estimates that President Barack Obama’s health care law will encourage millions of Americans to leave the workforce or reduce their work hours have touched off an I-told-you-so chorus from Republicans, who’ve claimed all along that the law will kill jobs. But some aren’t telling it straight.

The analysis by the nonpartisan Congressional Budget Office predicts the law will give several million people an opportunity to work less or not at all, because they won’t be stuck in jobs just for the sake of keeping the health insurance they get from employers. To some Republicans, that amounts to “wreaking havoc on working families,” “dire consequences for workers” and a shower of pink slips across the land – conclusions unsupported by the report.

The first two items Woodward placed into quotes presumably represent what Republicans actually said. Note that the third item about “pink slips” is not in quotes, because Republicans didn’t say it, which is good for them because it isn’t technically true. (Other elements of the law impacting the overall economy and U.S. competitiveness have great potential to lead to a “shower of pink slips,” but not the subsidies themselves taken in isolation.)

Continuing:

In a key point overlooked in the GOP response, the report says, “The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor.”

In other words, workers aren’t being laid off. They are taking themselves out of the workforce, in many cases opening job opportunities for others.

Two points. First, the GOP never said “workers are being laid off”; only the words Woodward stuffed in Republicans’ mouths say that. Second, the “others” who might get employed are looking at the same set of disincentives, and will in many cases react as those who take the “opportunity” to not work by deciding that work isn’t worth it.

Of the three Republicans quoted by Woodward, none directly said that Obamacare’s subsidy regime will lead to the equivalent of “a shower of pink slips,” and only the third is arguably erroneous, but not in the sense Woodward communicated:

SEN. MARCO RUBIO of Florida: “Just yesterday, the Congressional Budget Office found that Obamacare will cost millions of Americans their jobs.”

REP. JOHN KLINE of Minnesota: “The president’s health care law is destroying full-time jobs. … This fatally flawed health care scheme is wreaking havoc on working families nationwide.”

REP. PHIL GINGREY of Georgia: Obamacare creates “unprecedented uncertainty for job creators that, according to the nonpartisan Congressional Budget Office, will leave millions of people looking for work in the next few years.”

Rubio’s statement is accurate. Jobs that Americans might have taken won’t be there. People who might otherwise have been employed won’t be, not because of pink slips, but because of Obamacare’s disincentives.

Kline is correct. Obamacare is causing jobs which would otherwise have been created to not get created. If you take as a given that they would have been created without the law, then the prospect of their creation has been destroyed because of it.

Gingrey’s statement is problematic, but for a reason Woodward didn’t address. What will really happen is that millions of people will stop looking for work at all — or will be so picky in the work they’re willing to accept that they’re not going to find employers willing to hire them on their terms.

Cross-posted at NewsBusters.org.

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