A new Gallup poll released on Thursday finds that the U.S. uninsurance rate dropped to 16.1 percent — the lowest level in over a year — as Obamacare officially went into effect on January 1:
CREDIT: GALLUP
While the overall number is a modest decline from December’s 17.3 percent uninsurance rate, unemployed Americans have seen significant gains in health coverage since December. Since then, the uninsurance rate among this group has fallen by 6.7 percentage points. “The unemployed remain the subgroup with the highest uninsured rate at 34.1 percent, but the initial decline among this group suggests the healthcare law may be working as intended for unemployed adults,” wrote Gallup.
Non-white Americans also gained health care coverage between December and January, with their uninsurance rate falling by two percent.
To date, at least 2.2 million Americans have enrolled in private health plans through Obamacare’s state and federal insurance marketplaces. Another 6.3 million individuals weredeemed eligible for Medicaid or the Children’s Health Insurance Program (CHIP) between October and December.
It’s still unclear how many of the Medicaid enrollees are simply re-applying for coverage and how many are gaining it for the first time after becoming newly-eligible in states that expanded the program under Obamacare. But the drop in unemployed Americans’ uninsurance rate indicates that people who are struggling financially are likely taking advantage of Obamacare’s coverage options.
Assessing Obamacare’s total effect on the uninsured is impossible until the open enrollment season ends on March 31. Preliminary reports have indicated that most people who gained private coverage in the first three months had been previously insured — but that isn’t necessarily surprising considering that many junk insurance plans were outlawed by the health law beginning in 2014, encouraging people with those plans to enroll in new ones before the New Year in order to avoid a coverage gap.
Other surveys have suggested that uninsured Americans may be taking their time to assess coverage options under the health law. A Commonwealth Fund report from earlier this month found that just under six in ten potentially eligible uninsured adults who had either not visited an Obamacare marketplace or visited one without signing up for a policy said they plan to enroll by the end of March.
We know the unemployment rate dropped because workers left the labor force rather than because we created new jobs. But a lot of commentators — myself included — jumped to the conclusion that the workers who left the labor force did so because they were unable to find a job and so they gave up. A closer look at the data shows that’s not true.
There are lots of reasons people leave the labor force other than being unable to find work. They retire. They go to school. They start a family. They get married. Here’s how the numbers on workers not in the labor force for any reason have looked in recent years:
You can see the little jump at the end there. That’s the most recent employment report, and it’s why the unemployment rate went down.
The Bureau of Labor Statistics does not, as far as I know, keep very detailed statistics on most of these motivations. But they actually do check to see how many of the workers are out of the labor force because they’re discouraged about being unable to find work. And that number actually fell by 8,000 people between July and August, reaching it’s third-lowest point this year. Here’s the graph:
So we don’t know why more than 500,000 people left the labor force between July and August. But the numbers we have suggest that it wasn’t because the number of discouraged workers rose.
That said, “discouraged worker” is a very specific thing. It means a worker who looked for a job recently and gave up because they couldn’t find one. But we are seeing a lot of people who are out of the workforce and, though they’ve not necessarily been looking for a job, would still like to have one. Here’s that graph:
So here’s what we can say. We’re not adding enough jobs. The labor force has been shrinking. And lots of people who want a job don’t have one. But the number of actual “discouraged workers” is not rising, at least as far as we know.
Rep. Blake Farenthold (R-TX) held a “listening session” at Burns Elementary School on Tuesday where he discussed a variety of issues with a crowd of nearly two dozen constituents. One of the attendees uploaded video of the session on YouTube.
At one point during the session, a man asked about drug testing for “welfare recipients.” Farenthold said that this is an idea worth considering, and then went on to complain that unemployment insurance is too generous. He then compared Americans on unemployment insurance to alcoholics and drug addicts:
FARENTHOLD: Drug testing for recipients of various welfare programs, I really think that’s something that needs to be considered. We’ve gotta, you know, nobody wants to starve anybody. Everybody wants to help folks out. But we’ve got a system where you can stay on unemployment for an awfully long time. And I think we need to create a system of decreasing benefits over time to encourage you to get a job. I think anybody who’s had an alcoholic in their life or somebody with a drug problem, realizes that until things get bad enough there’s no incentive to change. I think that we’re so generous in some of our social problems that people are unwilling to get a job outside in the heat. Rather than get 15 dollars to go get roofing they’d rather get 9 or 10 dollars in benefits. I think drug testing is not an unreasonable requirement to get benefits.
Watch it:
Farenthold’s insults towards unemployed Americans are as devoid of factual backing as they are offensive. The reason there are so many unemployed people in his state right now is because the jobs simply do not exist, not that unemployment benefits are too “generous.” The following chart from the Bureau of Labor Statistics shows a gigantic jump in unemployment from 2008 to 2011. Unless the congressman is arguing that Texans simply became more lazy during this time or that there was a massive expansion of the welfare state during this time, it appears that the recession is the primary reason to explain unemployment, not meager benefits:
Additionally, it should be noted that U.S. social spending is far from “generous” when compared to other developed countries. Among OECD countries, the United States ranks second to last in social spending, ahead of only Turkey. Goldman Sachs actually studied this issue earlier this year and concluded that “only ½ percentage point of the current 9.4% jobless rate can be explained by the extension of UI benefits. Moreover, our calculations suggest that this effect will fade when the extended benefits eventually expire. These estimates—broadly in line with a recent study by the San Francisco Fed—reinforce our view that the overwhelming share of unemployment is cyclical rather than structural.”
From now until Nov. 2, the Republican Party will be the party of unemployment. The logic is straightforward: The more people who are unemployed on Election Day, the better the prospects for Republicans in the fall election. They expect, with good cause, that voters will hold the Democrats responsible for the state of the economy. Therefore anything that the Republicans can do to make the economy worse between now and then will help their election prospects.
While it might be bad taste to accuse a major national political party of deliberately wanting to throw people out of jobs, there is no other plausible explanation for the Republicans' behavior. The Republicans have balked at supporting nearly every bill that had any serious hope of creating or keeping jobs, most recently filibustering on bills that provided aid to state and local governments and extending unemployment benefits. The result of the Republicans' actions, unless they are reversed quickly, is that hundreds of thousands more workers will be thrown out of work by Election Day.
The story is straightforward. Nearly every state and local government across the country is looking at large budget shortfalls for their 2011 fiscal years, most of which begin July 1, 2010. Since they are generally required by state constitutions or local charters to balance their budgets, they will have no choice except to raise taxes and/or make large cutbacks and layoff workers to bring spending and revenue into line.
State and local governments have cut their workforce by an average of 65,000 a month over the last three months. Without substantial aid from the federal government, this pace is likely to accelerate. The Republican agenda, in blocking aid to the states, may add another 300,000 people to the unemployment roles by early November.
The blockage of extended unemployment benefits promises similar dividends. Unemployment benefits are not just about providing income support to those who are out of work, they also provide a boost to the economy. Since unemployed workers generally have little other than their benefits to support themselves, this is money that will almost immediately be spent. The benefits paid to workers are income to food stores and other retail outlets.
Unemployment insurance provides the sort of boost to demand that the economy desperately needs. That is why neutral parties like the Congressional Budget Office or economist Mark Zandi, a top adviser to John McCain's presidential bid, always list unemployment benefits as one of the best forms of stimulus.
Republicans give two reasons for opposing benefits. First, they claim that benefits discourage people from working. Second, they object that the Democrats' proposal will add to the national debt.
On the first point, there is a considerable amount of economic research. Most indicate that, in periods when the economy is operating near its capacity, more generous benefits may modestly increase the unemployment rate. However, they are less likely to have that effect now. The reason is simple: The economy does not have enough jobs. The latest data from the Labor Department show that there are five unemployed workers for every job opening.
In this context, unemployment benefits may give some workers the option to remain unemployed longer to find a job that better fits their skills, but they are unlikely to affect the total number of unemployed. In other words, a $300 weekly unemployment check may allow an experienced teacher the luxury of looking for another teaching job rather than being forced to grab a job at Wal-Mart.
However, if the teacher took the job at Wal-Mart, then this would simply displace a recent high school grad who has no other job opportunities. That might be a great turn of events in Republican-econ land, but it does not reduce the overall unemployment rate, nor does it benefit the overall economy in any obvious way.
The other argument the Republicans give is that these bills would add to the national debt. For example, the latest extension of unemployment benefits would have added $22 billion to the debt by the end of 2011. This means that the debt would be $9,807,000,000 instead of $9,785,000,000 at the end of fiscal 2011, an increase of the debt to GDP ratio from 65.3 percent to 65.4 percent.
It is possible that congressional Republicans, who were willing to vote for hundreds of billions of dollars of war expenditures without paying for them, or trillions of dollars of tax cuts without paying for them, are actually concerned about this sort of increase in the national debt. It is possible that this is true, but not very plausible.
The more likely explanation is that the Republicans want to block anything that can boost the economy and create jobs. Throwing people out of work may not be pretty, but politics was never pretty, and it is getting less so by the day.
Yesterday, National Review Online (NRO) posted an article by the American Enterprise Institute’s Kevin Hassett arguing that the fact that the recession has been worse for minorities “suggests that discrimination may well still be a factor in the American labor market.” In response, NRO hosted an online “symposium” for “some economics and civil-rights analysts to share their thoughts on the topic.” Their conclusion was that “Discrimination is an insufficient explanation for black unemployment.” Oliver Willis notes that NRO did not include any black participants in the discussion:
The thing is, there’s no law or rule that only black people can talk about issues affecting black people, or the same for white, Latino, Asian people, etc.
But considering the way the conservative movement insists that it is diverse, they couldn’t find one black person for their symposium? Not one?
National Review’s Daniel Foster responded to Willis on Twitter, saying, “We don’t do quotas. But there’s this Thomas Sowell guy who writes for us a lot. Pretty sure he’s an economist.” Robert A. George, who has written for National Review, tweeted that the “forum should have had black cons. viewpoint.”
UpdateCourtesy of Gawker, a look at the National Review's experts on black unemployment:
M.C.L Comment: Who's knows the black community better than upper class white conservatives?
