Thursday, February 6, 2014

Remember what the President said about the ACA and the Labor Market


Lux Et Veritas said...

By default, if the supply of labor decreases, the demand will increase. And since this market has consistently had an excess supply (for the last 10-15 years), then there will be NO decrease in the amount of jobs offered. Perhaps you have other concerns, but this slack MUST be eliminated if you are truly a proponent of efficient markets. And as the demand increases, so will the buyer's price offered to labor's sellers, i.e. wages will rise. If there is a downside to any of this, they do not in any way redound to the job seekers; at least not until the unemployment rate drops to the 4% range, and the involuntary labor participation rate decreased considerably from it's current level. We are quite a ways away from either of those occurrences. Though I don't believe my analysis can be challenged, I am interested to hear your refutation.

Unknown said...

Casey, your last point in the video above is the key to reality, understanding the distinction between purchases and transfers. I am going to post this on my blog in the hope more people will view the clip.

I consider myself a compassionate person who wants to help other people suffering economic distress. However, transfer payments are charity and can never be honestly portrayed as investment in any sense of the word.

The honest political question is whether we are prepared to forgo work, job creation, and economic growth in exchange for increases in perpetual charity. Our President's response to the February 4, 2014 CBO report on changes in work expected from ACA subsidies is, "yes."

The honest policy tradeoff that serves the long term interest is jobs over charity with an understanding that a safety net is not the same thing as perpetual charity.

Your work helps us all see more clearly.

Thank-you, Pete Weldon

Lux Et Veritas said...

Yes charity, what a heinous concept. It's interesting how a subsidy for health insurance is derided as a welfare entitlement devoid of any positive economic value, but a tax rebate for activities and businesses (energy, agriculture, carried interest, etc.) are noble and productive investments.