After obtaining coverage under the health-care law, some workers will choose to forgo employment, the report said, while others will voluntarily reduce their hours. That is because insurance subsidies under the law become less generous as income rises, so workers will have less incentive to work more or at all.
The design of the subsidies — like many programs in the social safety net — represents “an implicit tax on additional work,” CBO Director Douglas Elmendorf said.
The CBO attributed the decline in workforce participation primarily to this effect. But there were other, less important causes, too, including the likelihood that some employers will cut people’s hours, hire fewer workers or offer lower wages to new workers to avoid or compensate for a new fine on employers that do not offer insurance to employees who work more than 30 hours a week.
If we assume that these workers can count, and we assume that they know their own affairs, then the conclusion is not simply — never simply! — that “more than 2 million people will decide not to work,” but that the wage paid by this particular manifestation of the welfare state (in the form of insurance subsidies) is better than the wage on offer for doing work.
With one hand, the state puts downward pressure on wages — especially for those at the bottom end of the earnings spectrum, who are, by economic definition, those regarded by their employers as most easily replaced, and who therefore bring relatively little negotiating power to the table. With the other hand, the same state inflates the wages of non-work, not only through the new health-care law but through various other manifestations of the welfare state, including the ever-longer extension of unemployment payments. We are sometimes scandalized to learn that these programs spend a great deal of money on people who do not really need them. That is the minor scandal. The major scandal is that so many people do need these programs.
What is lost in the conversation we have about economic policy is the forgone human value that is the real penalty for mass unemployment. That is where our Keynesian aggregate-demand managers and fashionable uptown Communists like Jesse Myerson and narrow-minded writers for USA Today go well and truly astray. The make-work fallacy is not just a gigantic economic oopsie — it is an insult to the very humanity of our friends and neighbors, an implicit accusation that they have nothing of value to contribute to our shared community life.
Capitalism is not nearly as beady-eyed and green-eyeshaded as its critics would have you believe. Imagine transporting Mick Jagger and J. K. Rowling back in time even a few hundred years and presenting to the Sun King these two English subjects, richer than pharaohs and so celebrated that neither could go to a shop or stroll down the street without causing a sensation, and then explaining that they are, respectively, a singer of songs and a teller of children’s stories — not for Her Majesty, but for the common people. We are good to our poets. And we are very good to our plumbers and mechanics and builders. It is a testament not only to our wealth but to our spirit that people in Brooklyn can use the phrase “celebrity butcher” without falling down on the sidewalk laughing. I cannot imagine going back to the 1950s and trying to explain to my father, who worked in a butcher’s shop, that there would be such a thing as a celebrity butcher, and that people would pay $85 to take a two-hour class from one.
Not every butcher is a celebrity butcher. Some butchers are chain-store butchers, which probably is not as much fun and probably does not pay as well. And there are much, much less rewarding jobs than that. The difficulty and unpleasantness of work has no relationship to its pay. Some people make a great deal of money doing unpleasant things, but the fact is that very highly paid people tend to enjoy their work, and there are a not-inconsequential number of people who make a very good living doing things that they enjoy so much that they would do them for free if they were in different occupations. That split is in some ways more important than the crude $/hour difference in various occupations. Money is only one of the ways in which we are compensated; others include pleasure, economic security, and prestige. There’s a world of difference between being a $55,000-a-year professor and being a $55,000-a-year drugstore manager.
But both the celebrity butcher and the Walmart butcher put food on the table, literally and figuratively. The literally part may have something to do with our stressful relationship with work. A few years ago I had lunch with a lefty writer and activist who expressed his longing to quit his office job (he was an administrator in some kind of professional office, as I recall) and learn a trade such as plumbing or electrical work. Partly it was because he did not like his current position that much and desired a change, but there was something more to it: “I want to be able to explain to my children what I actually do for a living,” he said. I knew just what he meant. Some years before, I had visited the home of an acquaintance that was the most magnificent private home I had ever been inside: a gorgeous stone manor set on grounds that would have been the most prized park in a fair-sized city. I asked my host: “What do you do to be able to live in a house like this?” He was a little confused: “You know what I do. I’m the president of XYZ Corporation.” “Yes, yes, I know what you are, but what do you do? What do you do all day that makes all this possible?” Lots of telephone calls and meetings, near as I could tell.
Karl Marx wrote about the “alienation” of labor in a modern capitalist economy. Back when “artisanal” referred to something other than the offerings of your celebrity cheesemonger in Brooklyn, there was a more intimate connection between workers and their products, Marx believed. That made production, exchange, and consumption a different and more organic sort of emotional experience, taking needs and desires from the soul’s interior and making them “objective,” his term for physically manifest. “When looking at the object,” he wrote,
I would have the individual pleasure of knowing my personality to be objective, visible to the senses, and, hence, a power beyond all doubt. In your enjoyment, or use, of my product I would have the direct enjoyment both of being conscious of having satisfied a human need by my work, that is, of having objectified man’s essential nature, and of having thus created an object corresponding to the need of another man’s essential nature. . . . Our products would be so many mirrors in which we saw reflected our essential nature.