Millions of Americans are unhappy in their current jobs, but are forced to stay because of job lock. Job Lock refers to the peculiarly American problem where workers want to leave their jobs, but can't because they can't get insurance on their own.
Starting a business or retiring early will suddenly become an option under the new exchanges, experts say, especially for the many employees who have felt trapped by so-called “job lock” -- being stuck in a position because of the benefits, usually health insurance, it provides.
“The Affordable Care Act completely changes the playing field,” says Paul Fronstin, director of the health research programs at the Employee Benefit Research Institute. “You don’t need your employer any more for health benefits.”
It may be particularly attractive for older workers -- those in their late 50s and early 60s still too young for Medicare -- who will find they can get affordable insurance despite health problems. That will free them from the trap of needing to work, but being too sick to stay on the job, experts say.
While putting numbers on the impact this will have on entrepreuerialism is hard, statistics on recent trends in labor force participation among older adults show the potential for a large impact.
Labor force participation is the percentage of the population currently in work, or looking for it. As a whole, it has dropped over the course of the recession, lowering unemployment figures, an entirely different statistic. Yet, for one group labor force participation has been increasing: older adults.
For the population as a whole labor force participation declined from 66.5% in 1990 to 64.7% in 2010. This drop has been almost entirely concentrated among younger workers, while participation among older demographics has been increasing. The most substantial drop occurred among those 16-24, where participation fell from 67.3% in 1990 to 55.2% today. Participation among those 25-54 has remained largely static, but among those 55+ the increase in labor force participation has been dramatic. In 1990, 55.9% of those 55-64 were in the labor force, today that number has risen to 64.9%.
To put this into perspective, Census figures show 37 million American 55-64 as of 2011. Reducing labor force participation among this population to 1990 levels, would imply that 3.33 million newly vacated jobs would need to be filled. Seasonally adjusted numbers from the BLS show 11.3 million unemployed Americans as of August 2013. Which means that the impact of labor force participation for older adults falling to 1990 rates would likely reduce unemployment by nearly a third, dropping the overall unemployment rate to just over 5%
These are very much back of the envelope numbers, nonetheless they show the impact that Obamacare will likely have on the job market in the US. I can't help but think that this is in the back of the minds of those opposing the healthcare law. A reduction in the numbers of older Americans in the labor force, which is plausible as insurance access has been the limiting factor for many, would force employers to raise wages. I know that there is an argument that this will simply lead to greater outsourcing, however recent wage trends in China suggest that particular swindle is quickly coming to an end. That, though, is another diary.