Obama's budget contains, among other things, a pretty simple trade off. Higher taxes on the rich get you guaranteed access to affordable health care among the poor. The objection to this has been pretty simple: Raising taxes on the rich will retard job creation. Why, Mr. Obama, do you hate jobs? But it's pretty well understood that inadequate access to health coverage among the working and middle class also harms job creation. Unable to risk losing their employer-sponsored health insurance, would-be entrepreneurs don't start small businesses, they stay in jobs that don't maximize their productivity, they remain in positions that another worker would be better suited to. The magnitude of this sort of thing is hard to measure: It's tough to tell how workers who do have health insurance would act if they did not have health insurance. Harvard's Brigitte Madrian and MIT's Jon Gruber have taken a stab at it, but they basically concluded that the evidence conflicts, and the best you can say is that "health insurance plays an important role in job mobility decisions." More anecdotally, surveys show that workers say their health benefits are the number one reason they fear losing their jobs. But though you can argue over the precise size of the effect -- just as you can argue over the precise effect of slightly higher taxes on the rich -- it's pretty clearly there, and it's not obvious to me at least that it doesn't totally overwhelm the labor market impact of the tax changes. ON JOB CREATION.
Obama's budget contains, among other things, a pretty simple trade off. Higher taxes on the rich get you guaranteed access to affordable health care among the poor. The objection to this has been pretty simple: Raising taxes on the rich will retard job creation. Why, Mr. Obama, do you hate jobs? But it's pretty well understood that inadequate access to health coverage among the working and middle class also harms job creation. Unable to risk losing their employer-sponsored health insurance, would-be entrepreneurs don't start small businesses, they stay in jobs that don't maximize their productivity, they remain in positions that another worker would be better suited to. The magnitude of this sort of thing is hard to measure: It's tough to tell how workers who do have health insurance would act if they did not have health insurance. Harvard's Brigitte Madrian and MIT's Jon Gruber have taken a stab at it, but they basically concluded that the evidence conflicts, and the best you can say is that "health insurance plays an important role in job mobility decisions." More anecdotally, surveys show that workers say their health benefits are the number one reason they fear losing their jobs. But though you can argue over the precise size of the effect -- just as you can argue over the precise effect of slightly higher taxes on the rich -- it's pretty clearly there, and it's not obvious to me at least that it doesn't totally overwhelm the labor market impact of the tax changes. 
