tskeeter
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Post by tskeeter on Feb 4, 2014 13:35:15 GMT -5
The Congressional Budget Office has revised it's estimates of the impact Obamacare will have on employment. It's latest estimate reflects that the equivalent of 2 million jobs will disappear from the economy by 2017. This will happen as a function of reduced worker hours and workers who choose to supply less labor due to new taxes, "other incentives", and benefits. So, some folks hours willl be reduced, eliminating a portion of their job. Some will decide the rewards of working aren't worth the effort any more and elect to leave the workforce. Others will elect to leave the workforce because being on the taxpayer's payroll is less work than being on an employer's payroll. After all, an employer expects you to get out of bed and come to work. The taxpayers do not. finance.yahoo.com/news/cbo-obamacare-lead-2-million-154956476.htmlThe CBO estimates still project that employment will increase over the next decade. It's just that they are predicting that employment would have increased another 2 million jobs if Obamacare had not been enacted. Guess "you've got to vote on it to find out what it contains". N. Pelosi
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 13:39:32 GMT -5
If a worker decides to leave the workforce for whatever personal reason, has the job really disappeared? Won't it (or at least part of it) now go to another worker?
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tskeeter
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Post by tskeeter on Feb 4, 2014 13:48:20 GMT -5
If a worker decides to leave the workforce for whatever personal reason, has the job really disappeared? Won't it (or at least part of it) now go to another worker? Nope. On the surface, what you point out seems like that's what should happen. In reality, when a job opens up, that's a real good opportunity for the employer to make the job go away without having to let an employee go. I've used these types of opportunities to reduce staffing levels many times over the years. And the jobs I eliminated did not come back when the economy got better. They went away forever. Sure, some of the jobs of people who choose to leave the workforce will be filled. But, some will not. And it's these jobs that the CBO would be counting.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 14:14:55 GMT -5
I understand that some of those employers would do that, but that's not what the paragraph explains. It blames the job loss on people leaving the job, which is not what causes the job loss (and again, it would be only a partial job loss statistically). It's based on employers deciding to reduce functions at an opportune time rather than from a worker leaving a function. And in a weak economy where coaster jobs have already and continue to be reduced, it's more likely that remaining job functions are more necessary (and therefore would be kept) than in strong economies.
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comom1
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Post by comom1 on Feb 4, 2014 14:16:02 GMT -5
People leave work for all sorts of reasons. None of this is new. I'm not sure how the CBO can predict this with such certainty.
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tskeeter
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Post by tskeeter on Feb 4, 2014 14:21:34 GMT -5
People leave work for all sorts of reasons. None of this is new. I'm not sure how the CBO can predict this with such certainty. Considering that the CBO is saying their current projection of the impact of Obamacare is worse than they had previously predicted, I don't consider this projection to have "such certainty". However, considering the direction of these types of estimates, I suspect that the eventual impact is likely to be worse than the current projection. After all, how often does the CBO revise their estimates to reflect a more favorable situation than they had previously predicted?
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comom1
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Post by comom1 on Feb 4, 2014 14:25:01 GMT -5
I look at it this way. If two million people decide to leave their jobs and they aren't replaced, they weren't needed in the first place. Why would businesses keep employees they clearly don't need? Conversely, if they are needed, they will be replaced. I don't know of any business that keeps employees they don't need, for an unlimited amount of time, just to be nice.
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tskeeter
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Post by tskeeter on Feb 4, 2014 14:25:26 GMT -5
I understand that some of those employers would do that, but that's not what the paragraph explains. It blames the job loss on people leaving the job, which is not what causes the job loss (and again, it would be only a partial job loss statistically). It's based on employers deciding to reduce functions at an opportune time rather than from a worker leaving a function. And in a weak economy where coaster jobs have already and continue to be reduced, it's more likely that remaining job functions are more necessary (and therefore would be kept) than in strong economies. No, but it is what this CBO comment explains. " Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA"
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 14:29:19 GMT -5
I look at it this way. If two million people decide to leave their jobs and they aren't replaced, they weren't needed in the first place. Why would businesses keep employees they clearly don't need? Conversely, if they are needed, they will be replaced. I don't know of any business that keeps employees they don't need, for an unlimited amount of time, just to be nice. And it's interesting that we're blaming this loss of jobs on 'Obamacare' and the workers, rather than businesses doing what seems logical in a tight economy: leaning up their workforces or using retirements to reduce unnecessary functions.
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comom1
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Post by comom1 on Feb 4, 2014 14:30:19 GMT -5
I look at it this way. If two million people decide to leave their jobs and they aren't replaced, they weren't needed in the first place. Why would businesses keep employees they clearly don't need? Conversely, if they are needed, they will be replaced. I don't know of any business that keeps employees they don't need, for an unlimited amount of time, just to be nice. And it's interesting that we're blaming this loss of jobs on 'Obamacare' and the workers, rather than businesses doing what seems logical in a tight economy: leaning up their workforces or using retirements to reduce unnecessary functions.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 14:31:16 GMT -5
" Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA" Mythical jobs which don't currently exist and may or may not exist in the future have been rendered obsolete already! That actually seems kind of efficient.
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comom1
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Post by comom1 on Feb 4, 2014 14:33:22 GMT -5
I like mythical jobs. They should pay better, though.
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tskeeter
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Post by tskeeter on Feb 4, 2014 14:33:43 GMT -5
I look at it this way. If two million people decide to leave their jobs and they aren't replaced, they weren't needed in the first place. Why would businesses keep employees they clearly don't need? Conversely, if they are needed, they will be replaced. I don't know of any business that keeps employees they don't need, for an unlimited amount of time, just to be nice. Comom, most businesses keep employees available to deal with fluctuations in business volume and absences such as sick days, vacations, and the like. A common rule of thumb for business planning is to make sure you have the ability to handle a 20% increase in volume. Some of such an increase could be absorbed through overtime. But, some of the flexibilty comes from staffing slightly in excess of the bare minimum. This practice isn't the most effective on a day by day basis, but it is a level of inefficiency many busineses can absorb. However, when you increase the cost associated with inefficiency, you encourage business operators to try to operate closer to the bare minimum staffing level. So you'll have to wait for a clerk at a department store during the lunch rush part of the day. But Macy's is paying for three fewer people in every store. Jobs that went away.
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comom1
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Post by comom1 on Feb 4, 2014 14:40:28 GMT -5
I look at it this way. If two million people decide to leave their jobs and they aren't replaced, they weren't needed in the first place. Why would businesses keep employees they clearly don't need? Conversely, if they are needed, they will be replaced. I don't know of any business that keeps employees they don't need, for an unlimited amount of time, just to be nice. Comom, most businesses keep employees available to deal with fluctuations in business volume and absences such as sick days, vacations, and the like. A common rule of thumb for business planning is to make sure you have the ability to handle a 20% increase in volume. Some of such an increase could be absorbed through overtime. But, some of the flexibilty comes from staffing slightly in excess of the bare minimum. This practice isn't the most effective on a day by day basis, but it is a level of inefficiency many busineses can absorb. However, when you increase the cost associated with inefficiency, you encourage business operators to try to operate closer to the bare minimum staffing level. So you'll have to wait for a clerk at a department store during the lunch rush part of the day. But Macy's is paying for three fewer people in every store. Jobs that went away. Skeeter, this has been going on for the last several years. I work for an airline and I can tell you that we work more short-handed than we ever did. It's the same way everywhere. DH's company laid off every employee they possibly could during the recession. Now they're unbelievably short-handed, but they figure they don't need to hire anyone because they got along for a few years without them. Neither of our companies care if business suffers to a degree, the bottom line looks so much better and that's all they care about. As a small business owner, I can tell you that we don't hire more than we need. It makes no sense. Rather than have a maintenance guy on payroll, I have a guy that I contract with for everything. He can take other jobs and I don't have the headache of an employee. I suppose the CBO would consider him unemployed, but he likes his independence, even if that is one of those mythical jobs that won't be created.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 14:41:04 GMT -5
The report goes on to say that this represents 1.5% to 2% of hours worked, it's largely among low-wage jobs (due to the subsidies), and because of this it's overall economic impact will be smaller than this reduction in hours worked. But 2 million jobs(!) makes much better headlines.
www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014.pdf
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.
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comom1
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Post by comom1 on Feb 4, 2014 14:46:40 GMT -5
Damn it Rocky, don't go messing with sensationalism! Logic is soooooo boring.
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tskeeter
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Post by tskeeter on Feb 4, 2014 14:47:08 GMT -5
I look at it this way. If two million people decide to leave their jobs and they aren't replaced, they weren't needed in the first place. Why would businesses keep employees they clearly don't need? Conversely, if they are needed, they will be replaced. I don't know of any business that keeps employees they don't need, for an unlimited amount of time, just to be nice. And it's interesting that we're blaming this loss of jobs on 'Obamacare' and the workers, rather than businesses doing what seems logical in a tight economy: leaning up their workforces or using retirements to reduce unnecessary functions. Rocky, what I find interesting about this announcement is that it is put out by the CBO, not some non-governmental source. Let's see, the administration and Congress are currently led by Democrats. Democrats were the champions of Obamacare. The CBO, in effect, works for Congress. So, in attributing job losses to Obamacare, the CBO is stepping on it's boss's toes. I don't know about you, but I don't step on my boss's toes unless there is no way I can avoid it. I interpret the CBO's announcement to indicate that the situation is so much worse than origianlly projected that, in order to avoid looking hopelessly incompetent, the CBO needs to start floating some more realistic numbers to maintain some semblance of credibility.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 14:48:40 GMT -5
I find it encouraging for a sense of increased transparency that reports that are less-than-flattering are produced.
I also find it interesting that this is the only part of a 182 page overall budget report that anyone can find anything to report on...
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comom1
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Post by comom1 on Feb 4, 2014 14:52:20 GMT -5
The CBO is non-partisan. That means they can step on toes if need be. I think that's a good thing. I don't, however, think that they should try to count jobs that won't be created. There's no way to know that and it's that fuzzy math thing that I find irritating. They should be above that.
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milee
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Post by milee on Feb 4, 2014 14:57:39 GMT -5
Automation is another issue to consider.
As labor costs rise (and ACA is part of what is causing labor costs to rise), automating tasks gets more appealing. Every dollar increase in wages makes the calculation for investing in automation all the more appealing.
So some of the issue may be that companies will just run short staffed or work existing employees harder, but a good chunk is that companies will pony up to buy technology to replace workers.
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tskeeter
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Post by tskeeter on Feb 4, 2014 15:00:09 GMT -5
The report goes on to say that this represents 1.5% to 2% of hours worked, it's largely among low-wage jobs (due to the subsidies), and because of this it's overall economic impact will be smaller than this reduction in hours worked. But 2 million jobs(!) makes much better headlines.
www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014.pdf
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. Gee whiz, that might be why I said both "choose to supply less labor" and, twice, "elect to leave the workforce" in my first paragraph. And why I provided a link for those who are interested in reading the complete article. You appear to be trying to imply that I misrepresented the content of the article, when in fact I pointed out on three separate occassions in a single parapgraph that jobholders were expected to leave the workforce voluntarily. Meanwhile, you neglect to point out that the CBO clearly states that there would be more jobs "in the absence of the ACA".
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 15:04:04 GMT -5
I am pointing out that the portion of the article you highlighted does not reflect the less-interesting facts of the report. I simply pointed out some of those less interesting parts, as opposed to the headline-seeking phrases like "2 million jobs lost!" and "eliminating jobs!".
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Deleted
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Post by Deleted on Feb 4, 2014 15:12:15 GMT -5
I was at the Grocery Outlet up in Oregon the other day. Two of the employees were complaining that a new policy was put into place where anyone who is not management is now limited to 24 hours in a week maximum. They were complaining that the new policy stated that ACA was the reason for this new mandate. They were asking each other how they were going to pay their bills and insurance under ACA with only 100 hours of working at minimum wage per month.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 15:16:06 GMT -5
I was at the Grocery Outlet up in Oregon the other day. Two of the employees were complaining that a new policy was put into place where anyone who is not management is now limited to 24 hours in a week maximum. They were complaining that the new policy stated that ACA was the reason for this new mandate. They were asking each other how they were going to pay their bills and insurance under ACA with only 100 hours of working at minimum wage per month. I'm guessing that at those income levels, they'd either qualify for expanded medicaid or the fullest subsidy for their insurance.
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comom1
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Post by comom1 on Feb 4, 2014 15:20:33 GMT -5
They could do like some of us did. Get a second job. As Rocky pointed out, insurance will most likely cost them nothing if they are truly minimum wage at 24 hours a week.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 15:23:51 GMT -5
They could do like some of us did. Get a second job. As Rocky pointed out, insurance will most likely cost them nothing if they are truly minimum wage at 24 hours a week. And... not that I'm saying this a good thing for taxpayers, but it's reality at this point...their refundable tax credits will go up based on their reduced income.
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alabamagal
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Post by alabamagal on Feb 4, 2014 16:03:35 GMT -5
They could do like some of us did. Get a second job. As Rocky pointed out, insurance will most likely cost them nothing if they are truly minimum wage at 24 hours a week. And... not that I'm saying this a good thing for taxpayers, but it's reality at this point...their refundable tax credits will go up based on their reduced income. Right so they get more money from the government. We are encouraging businesses to give them less money so they get more from the goverment?
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alabamagal
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Post by alabamagal on Feb 4, 2014 16:03:51 GMT -5
They could do like some of us did. Get a second job. As Rocky pointed out, insurance will most likely cost them nothing if they are truly minimum wage at 24 hours a week. And... not that I'm saying this a good thing for taxpayers, but it's reality at this point...their refundable tax credits will go up based on their reduced income. Right so they get more money from the government. We are encouraging businesses to give them less money so they get more from the goverment?
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comom1
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Post by comom1 on Feb 4, 2014 16:09:30 GMT -5
Georgia, it's unlikely that reducing a minimum wage worker's hours by 6/wk would drastically change any of that. Even at 30 hours they would most likely be eligible for a substantial subsidy.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Feb 4, 2014 16:10:37 GMT -5
Think they thought that one through?
Seriously, I don't worry too much about the really low-wage workers in this transition, despite the teeth-gnashing about reduced hours and having to purchase insurance. There are going to be a lot of work-arounds, and some might even come out ahead. It's the middle-level workers who will likely have bigger headaches.
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