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Analysis: Job Growth Was 10-Fold Higher Before the Democrats Passed Obamacare

4:57 PM, Jul 21, 2011 • By JEFFREY H. ANDERSON
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The Obama administration’s Bureau of Labor Statistics shows that, since the official end of the recession over two years ago (in June 2009), the percentage of Americans who are employed has actually dropped, while most Americans who are employed are now making less money (in inflation-adjusted dollars) than they were during the recession. Why is our economy plainly failing to match the historical pattern of strong growth following a recession? New analysis suggests that Obamacare (signed into law — “With the strokes of 22 pens” — on March 23, 2010) could be a principal cause.

Obama SOTU

The Heritage Foundation’s James Sherk writes, “Private-sector job creation initially recovered from the recession at a normal rate, leading to predictions last year of a “Recovery Summer.” Since April 2010, however, net private-sector job creation has stalled. Within two months of the passage of Obamacare, the job market stopped improving. This suggests that businesses are not exaggerating when they tell pollsters that the new health care law is holding back hiring.” 

Sherk writes that Obamacare “discourages employers from hiring in several ways: 

  • “Businesses with fewer than 50 workers have a strong incentive to maintain this size, which allows them to avoid the mandate to provide government-approved health coverage or face a penalty;
  • “Businesses with more than 50 workers will see their costs for health coverage rise — they must purchase more expensive government-approved insurance or pay a penalty; and
  • “Employers face considerable uncertainty about what constitutes qualifying health coverage and what it will cost. They also do not know what the health care market or their health care costs will look like in four years. This makes planning for the future difficult.”

Sherk then provides the following chart, showing that prior to the first full month in which Obamacare was law (April 2010), the economy added an average of 67,600 jobs per month during Obama’s presidency (which includes several months during the recession).  Following the first full month in which Obamacare was law, however, the economy has added an average of just 6,400 jobs per month under Obama’s presidency — less than one-tenth the previous rate.

Sherk writes, “The fact that improvements in the job market ground to a halt after [Democrats] passed Obamacare does not prove that the health care law caused [this result] — correlation cannot prove causation. However, the fact does lend strong weight to the voices of businesses who say that the law is preventing hiring.”

No wonder the U.S. Chamber of Commerce — along with most Americanssupports repeal of President Obama’s “burdensome” and “misguided” health care overhaul.

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