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Posted by on Oct 23, 2013 in Economy, Science & Technology | 5 comments

Employment and the ACA

While opponents of the ACA have claimed that it will result in more part time employment Matthew Yglesias notes that part time employment is actually on the decrease.   He thinks that this may not last but not because of the reasons given by opponents of the ACA.

My strong suspicion is that if the ACA has an impact on the labor force (which it probably will) it will be through a different mechanism. Right now “in order to qualify for health benefits” is a very good reason to work full-time, even if you’d rather have more free time and less money at your current wage level. The Affordable Care Act will make this benefit qualification rationale less compelling, and for families who are within the range for ACA subsidies it will also make the trade of more free time for less money more attractive. Which is to say that rather than making employers more reluctant to hire, the ACA is likely to make workers more reluctant to work—especially more reluctant to work long hours for meager wages in unpleasant conditions.

220px-OscilloscopeI suspect this is correct but I think Yglesias ignores another major impact of no longer being forced to rely on employer health insurance.  In the 1980s I was an Engineer for the innovative high tech powerhouse Tektronix.  There was a constant stream of talented engineers and executives who left the company to found spin offs.  Many of these failed but many did not adding to the the innovative dominance of the United States.  Although Tektronix itself really no longer exists many of these spin offs still do.  Fast forward to the late 90s and 2000s and it became nearly impossible for people in their late 40s and 50s to get affordable health insurance on their own.  As a result many talented engineers would have to think twice about leaving the company that gave them health insurance.  The result was less innovation and fewer new companies and fewer job opportunities. The ACA has the potential of changing this dynamic and and once again fostering an atmosphere of innovation and job creation.