It Is Not Good News That Obamacare Will Create Lots of Jobs to Steer People Through the System

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Saturday, 27 July 2013 07:56

"Which way is up?" reporting makes a big-time appearance in this Washington Post article telling us that Obamacare will create a boom in jobs since workers will have to be hired to steer people through the system. The article reports:

"About 7,000 to 9,000 new customer service agents will be needed to man phones and Web chats for the marketplace, called an exchange, the federal government will run for more than half of the states, a spokesman for the Centers for Medicare and Medicaid Services said. Additional agents will be needed for exchanges run by the states themselves."

The next paragraph raises the stakes to:

"Altogether, tens of thousands of people could be hired over the next several years to set up and support the online marketplaces, according to some estimates."

Okay, let's make it three tens of thousands (a.k.a. 30,000). If we continue to create jobs at the rate of 170,000 a month (an assumption, not a forecast), then we will create 6.1 million jobs. This means that our 30,000 Obamacare jobs will be a bit less than 0.5 percent of net job creation over this period. That's a plus, but not exactly a boom.

More importantly, the jobs needed to steer people through the system are a waste from the standpoint of the economy as a whole. In an efficient system people can figure out how to get their health care without needing a consultant to guide them through a complex process. The fact that Obamacare may require people for this task means that it is adding waste to the health care system.

In a recession, anything that employs people can be seen as positive since otherwise they would sit home doing nothing. However if we envision at some point that we will be back to something resembling full employment, it would be much better to have a health care system that did not require tens of thousands of workers to explain insurance options to people.