Blog : Take This Job and Shove It

by Ed Zwirn on February 5th, 2014

When I lived and worked in Ukraine in the mid-1990s, I became aware that many people were afraid to quit jobs that were grueling, dead-end and dangerous, even in the many cases in which their pay was months in arrears, because they were afraid to lose access to the free healthcare these jobs provided.

Fortunately few (if any) Americans work at occupations as dangerous as work at a Ukrainian coal mine, and, if they did, they would quit as soon as their employer started failing to pay them. That being said, many people in the U.S. have, at least up until now, held on to jobs they don't like for fear of losing benefits.

This is borne out by a report released this week by the Congressional Budget Office. According to the report, which has unfortunately been used to support the conservative thesis that Obamacare is a "job killer," the workforce in the U.S. will be reduced by the equivalent of 2.5 million full-time jobs, but the drop will mostly come from Americans reducing their own work hours out of choice. With easier access to health care outside of the full-time job market, many (me, for instance) have already stopped seeking employment to do work they enjoy or which suits them, in what many reports refer to as a rising freelance trend.

According to the COBs 2014 to 2024 Budget and Economic Outlook report, the Affordable Care Act "will reduce the total number of hours worked, on net, by about 1.5% to 2% 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."

According to the report, the new law could make it easier for workers to take jobs that match their skills, now that they don't have to worry about insurance. If this holds true going forward, look for unemployment rates to continue to decline despite relatively low job creation figures.

The decline in the "labor participation rate," which has been noted in every monthly non-farm payroll report put out by the government recently, will probably continue in the years ahead. Some of this will be due to people giving up the job search because they are discouraged.

But it is important to keep in mind that there are other factors at work: For one thing, internet and mobile technology makes it easier to "telecommute" instead of driving to work and sitting in an office where the most personal satisfaction obtainable comes either from an office fling (real or imagined) or a sports betting pool victory.

Fortunately for me, I have never been forced to risk my life and health as a Ukrainian coal miner. But the same principle applies to me and millions of other Americans. I am blessed that I get to work from home and do what I like (and am good at) and have been doing so for many years. The removal of the healthcare Sword of Damocles has convinced me that there is no need to turn back.

I think that this is a healthy development for the U.S. economy and way of life. The artificial connection between employment and access to healthcare has long been eliminated from almost every other Western economy. As the U.S. transitions, kicking and screaming, from a job-based health benefit system, the potential exists for a major unleashing of productivity and initiative.

It has long been a truism that small businesses are the biggest job creators and this appears to be the case as many penny stocks grow into behemoths, developing everything from new cancer cures to new iPhones. If this is true, even smaller businesses (like me) may wind up generating even more money for circulation into the larger economy, with geezers like me only too happy to step aside, go into business for ourselves, and let younger people enter into the workforce and pay their proverbial dues.

Keep this incipient trend in mind when you look at the reaction to Friday's January jobs report. As I reported in a Penny Stock Week last month, in a major surprise for the financial markets, the government reported that only 74,000 jobs had been added in December. At the same time, as many people stopped looking for traditional full-time work (some out of discouragement), the unemployment rate dropped to 6.7%, its lowest level in years.

I live out in the woods on a private road and have had to hire someone to plow me out during the many snowstorms we have had so far this winter. Like any business, this fellow has had to invest in capital equipment, maintain it and fuel it. I have no doubt that most of the money I pay this man for this indispensable service goes right back into circulation as he pays his mortgage and taxes and buys food and clothing and heat and light for his family. The nature of his work puts him outside of what we traditionally consider the "labor force." Whether or not he can afford to pay for medical care should be in no way dependent upon whether he works for himself or for others.