The Wall Street Journal reported on the weak January jobs number. It's sure that Obamacare is somehow responsible, it just can't quite get a clear story together.
The article begins:
"A hiring chill hit the U.S. labor market for the second straight month in January, reflecting employers' reluctance to take on new workers despite some of the nation's strongest economic growth in years."
So the story is that the economy is growing rapidly, but firms for some reasons are not hiring workers. We get that more explicitly a couple of paragraphs down.
"The report left several puzzles unanswered, including the dichotomy of solid growth and weak hiring. Throughout the recovery, businesses have been able to boost production at a faster pace than employment. That trend could also be supporting GDP growth despite the hiring slowdown."
So businesses have been scared away from hiring and are instead increasing productivity. So let's look at that soaring productivity growth.
Source: Bureau of Labor Statistics.
Yeah, well not quite. Productivity growth has been 1.7 percent over the last year. That's well below the 2.8 percent average in the decade before the downturn and spectre of Obamacare haunted the business world.
If productivity growth doesn't explain the lack of hiring maybe firms are increasing hours to avoid having to commit themselves to hiring new workers. That one won't help either. The average weekly workweek was 34.4 hours in January, that's above the lows hit in 2009 and 2010, but still below the 34.5-34.6 range we saw in 2007. And the average workweek actually has fallen since November. So the WSJ wants to tell us that firms are seeing increased demand for labor and aren't meeting it through hiring, but apparently also are not meeting it through productivity growth or increased hours: very interesting.
After giving us a bit more information about the new jobs numbers the article returns to Obamacare:
"The health-care sector added just 1,500 jobs in January after a gain of 1,100 jobs in December. The sector had supplied a steady stream of jobs for years, raising more questions about whether the rollout of the Affordable Care Act last fall is restraining hiring.
"The health law has curbed hiring at Pita Pit USA Inc.'s 220 sandwich shops, said Peter Riggs, a vice president at the Coeur d'Alene, Idaho, firm. 'We're not quite sure what the unintended consequences of the Affordable Care Act will be,' he said. 'We have an ongoing commitment to the people we've already hired, but we're more wary than in the past about hiring too many new people.'"
This is more than a bit bizarre. One of the goals of Obamacare is to restrain cost growth in health care. This will likely mean restraining employment growth in the health care sector. That is a point of the Affordable Care Act (ACA), not an unfortunate consequence.
On the other hand there is a totally separate question as to whether the ACA would reduce hiring in other sectors. The WSJ again tells us it has found a business person who claims this is the case, but the data do not support the claim that this is a more general problem.
Anyhow, everyone should know that the WSJ is working hard to convince us that Obamacare is really bad for job growth. One day they may have some evidence to support this view. Btw, this is a news article.
Note: Typo fixed -- thanks Jennifer.
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