CBO: Obamacare Will Increase Voluntary Leisure

The CBO released its budget outlook today. In it, they estimate that Obamacare will lead to more voluntary leisure:

CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024 almost entirely because workers will choose to supply less labor given the new taxes and other incentives they will face and the financial benefits some will receive. Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked.
 
So in essence, business demand for labor is not projected to decline, but the willingness of workers to supply it is projected to shrink slightly. So it is not the story conservatives have been telling about employers hiring less because of regulations and costs and whatever. Instead, it is that some workers (low-wage workers in particular according to the CBO) will withhold their labor because, with expanded access to health insurance, they don't need to work as much.
 
This is awesome.
 
The U.S. has some of the highest numbers of hours worked in the OECD.
 
 
In 2012, American workers put in nearly 1800 hours. Germany and the Netherlands put in less than 1400. France and Norway put in under 1500. Belgium and Denmark put in under 1600. Finland, Switzerland, Sweden, the UK, and many others put in less than 1700.
 
The point is: the U.S. works a ton of hours, way too much for a country as rich as it is. Increasing social provision in a way that gives people the ability to voluntarily reduce their hours (i.e. not because there are no jobs, but because they'd rather reduce their market labor) is a really good idea. We should be doing more of it.
 
Beyond the advantages of voluntary increases in leisure, the CBO's take on things indicates that labor markets will become tighter, which will work to the benefit of working people. If business demand for labor remains the same (as the CBO suggests) and workers' willingness to supply it declines, it doesn't take a genius to see that this means more bargaining power for workers. To satisfy its demand for labor, capital will have to do more to entice people off the sidelines, either through better working conditions or more pay.
 
Now, some conservatives have not taken kindly to this CBO revelation. Of course, they rarely do take kindly to those things which empower labor over capital. But conservatives who would unwind this law in order to push people voluntarily reducing their work hours back into the labor market are a bit sadistic. Threatening people with untreated disease and pain to get them to work more (which is what such an advocacy entails) is not a very pleasant thing to contemplate, and is totally unecessary in a country this rich.
 
Overall, we have some great news here. If the CBO is right, we are headed into a world with more voluntary leisure, tighter labor markets, and a slight shift of the balance of power from capital to labor. In an overworked country where capital is so ascendant of late, this should be welcomed.

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