In mid-January, the Federal Reserve released its monthly Beige Book, which offers a wide-ranging look at commentary on economic conditions in each of the central bank’s 12 regions. While it’s mostly mundane, the Heritage Foundation found some key details buried in the report that relate to Obamacare and its affect on employment:
The Beige Book finds businesses repeatedly stating that Obamacare and rising health care costs have held back the labor market:
- Atlanta Fed: “On balance, many firms expressed continued hesitancy caused by concerns about healthcare reform in terms of their overall hiring plans” (p. VI-3).
- Richmond Fed: “Employers continued to express concern about potential cost increases related to [Obamacare]” (p. V-4).
- Chicago Fed: “Non-wage labor costs also increased, with a number of contacts reporting higher healthcare premiums” (p. VII-3).
- Boston Fed: “Downside risks include the upcoming costs to businesses of compliance with [Obamacare] and the trend toward office downsizing on a space-per-person basis” (p. I-3).
- Philadelphia Fed: “Firms also expected to see the largest increase in health benefits costs compared with other input and labor costs in 2014” (pp. III-1 and III-2).
- Cleveland Fed: “A majority of our contacts cited rising healthcare insurance premiums as a concern” (p. IV-2).
Obamacare has substantially increased the cost of doing business. That ultimately hurts current workers—especially job seekers—by making businesses more cautious about hiring new employees.
Previous Beige Book reports have displayed similar findings from various Federal Reserve districts, confirming what we already knew about the law’s impact on the labor market. CBO Director Doug Elemendorf said in February 2011, for example, that Obamacare would reduce employment by 800,000 by 2021.
Obamacare isn’t entirely blame, though the regulatory environment in the United States isn’t friendly to businesses, the December jobs report found that the labor participation rate is back at its lowest point since 1978 and, more than five years after the Great Recession ended, the lowest point of Barack Obama’s presidency.