Where Have All the Workers Gone?

By: Dr. Lynn Reaser 

ImageThe nation’s business economists have just concluded their annual Policy Conference at the National Association for Business Economics (NABE) in Washington, D.C.  Many topics were covered, including employment, demographics, changes in the health care landscape, and immigration.  These issues intersect.

The Affordable Care Act will give less incentive to work.  Some individuals will cut their working hours in order to stay below the limits required for health insurance subsidies.  Others may retire earlier than otherwise since their employer may no longer provide health insurance or because they will not be precluded from insurance because of pre-existing conditions.

Labor force growth could thus be slower than has previously been projected, which will have some negative economic effects.  A smaller rise in the work force will dampen economic growth and gains in per capita income.  It will make it more difficult to pay for the cost of social security, health care, national security, and other government programs.  It also raises the risk that individuals will retire without the necessary savings and assets to last for the remainder of their lives, which are becoming increasingly longer.

Immigration to offset smaller indigenous increases in the labor force will be necessary to sustain faster economic growth, which is another reason why immigration reform is so critical.


2 responses to “Where Have All the Workers Gone?

  1. On the other side with health insurance possible people might move from less productive but relatively secure positions to more productive work doing things they always wanted to do. It isn’t clear what the net effect will be and ignoring the difficult to quantify possible positive effects and only pointing out problems isn’t an accurate analysis.

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