Obamacare destroying jobs? Not so fast.

Photo by photologue_np used under a Creative Commons License.
Photo by photologue_np used under a Creative Commons License.

Three years after it was signed into law, the Affordable Care Act (ACA, also known as Obamacare) remains contentious. Critics have especially focused on a provision that requires businesses with 50 or more full-time employees to offer affordable health insurance to workers or be fined $2,000 per employee, excluding the first 30 employees. This “employer mandate” has been delayed until 2015; that didn’t stop The Oklahoman from running an editorial to claim that the employer mandate is killing jobs. The Oklahoman uses a single anecdotal example to make its criticism, while ignoring the many ways that the Affordable Care Act is a positive force for American business.

First, we can find many examples of how the ACA is directly creating jobs in Oklahoma and across the US. The ACA brought nearly 500 jobs to the city of Lawton, where a government contractor has built a facility to process applicants on the ACA health insurance marketplace. Oklahoma health centers have received over $61 million under the ACA “to provide primary care, establish new sites, and renovate existing centers”, all of which will support and create jobs.

Analysts report a growing cottage industry centered around administration and implementation of the ACA. A California study estimates that “the federal health care law would create almost 100,000 new jobs across California and boost economic output by $4.4 billion”; Fox Business featured a roundup of “six fields where Obamacare is creating jobs.”

But perhaps the largest pro-business impact of the ACA is the security and freedom it offers to hardworking Americans. By creating a functional individual insurance market and ending discrimination against people with preexisting conditions, the ACA allows Americans more freedom to work the jobs they want. “Job lock,” a phenomenon where employees are stuck in jobs that don’t make full use of their skills and talents because they need the health benefits, will virtually vanish.

That’s especially important because entrepreneurs and startups are the primary source of new jobs in the economy as a whole. And the Affordable Care Act will be a major boost to entrepreneurship. The Urban Institute and the Georgetown University Health Policy Institute estimate that due to the ACA, “the number of self-employed people 1.5 million higher than it would otherwise have been” – an increase of about 11 percent. The report estimates an increase of 23,000 self-employed workers in Oklahoma. As Forbes notes:

There are untold millions of would-be entrepreneurs in the U.S. hanging on, in quiet desperation, to deadening corporate jobs–because they can’t afford to leave. …Imagine the creative and economic boon when all of this talent and energy is released from the corporate tethers that bind it.  It will be remarkable.

At the same time, the total number of businesses likely to cut workers due to the employer mandate is quite small; companies with close to 50 workers employ only about one percent of the US workforce. A few employers may cut back, and that will be painful for employees who lose jobs or see their hours slashed. But overall, that cost will be dwarfed by the benefits of job growth, financial security, and improved health due to the ACA. That may be why we are not seeing any evidence of an increase in part-time workers or a slowdown in job creation as the law has gone into effect.

 Unfortunately, Oklahoma has failed to take advantage of a golden opportunity to help even more businesses by accepting federal funds to expand health insurance coverage to low-income workers. More than 140,000 working Oklahomans could gain coverage, with workers in the food services industry, construction, education, and nursing home care most likely to benefit. Employers in these sectors would gain access to a healthier workforce, with less absenteeism and employee turnover due to medical issues.

By directly creating jobs, freeing more Americans to pursue entrepreneurship, and ensuring a healthier workforce, it’s clear that the Affordable Care Act is good for business.

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Carly Putnam joined OK Policy in 2013. As Policy Director, she supervises policy research and strategy. She previously worked as an OK Policy intern, and she was OK Policy's health care policy analyst through July 2020. She graduated from the University of Tulsa in 2013. As a student, she was a participant in the National Education for Women (N.E.W.) Leadership Institute and interned with Planned Parenthood. Carly is a graduate of the Oklahoma Center for Nonprofits Nonprofit Management Certification; the Oklahoma Developmental Disabilities Council’s Partners in Policymaking; The Mine, a social entrepreneurship fellowship in Tulsa; and Leadership Tulsa Class 62. She currently serves on the boards of Restore Hope Ministries and The Arc of Oklahoma. In her free time, she enjoys reading, cooking, and doing battle with her hundred year-old house.

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