If a business owner has three job openings and 10 people apply, she can pay less than if only two apply. It’s one of the most simple examples of the law of supply and demand—the less the supply or the greater the demand, the higher the price.
The law of supply and demand is a basic principle of western economic theory and explains why Republicans and right-wingers are sincere when they say that it’s an economic disaster that 2.5 million job-holders will probably retire from the work world when they have secure and inexpensive health care insurance under the Patient Protection and Affordable Care Act (ACA). It’s an economic disaster, but only for rich folk who do most of the hiring.
Certainly, the Republicans and other right-wingers lie when they say that 2.5 million jobs will be lost, but they are lying out of a sincere motive: they fear the impact of that many people exiting the job market on the economy. They don’t care about the size of the economy. They care about their cut. And with fewer people seeking or wanting to hold jobs, businesses will have to pay more to replace the 2.5 million who bid Sayonara to the rat race, but also to attract other workers.
Maybe I missed it, but I don’t think anyone has mentioned that the net effect of 2.5 million people leaving the workforce will be a decline in unemployment. It has to be, because employers will most definitely hire another 2.5 million to replace the ones going on permanent vacation. They’ll hire them because no matter what any right-winger tells you, very few if any businesses that last beyond a few months will ever hire an employee they don’t believe they need, unless it’s a relative. I think we can assume that the sibling, children, nieces and nephews are mostly already hired and that employers will replace most of the 2.5 million who quit their jobs or went part time.
A lower employment rate also leads to a higher price on the labor of one worker. Because 2.5 million now feel secure enough to retire from working a job, the people who keep working will see their wages and benefits increase. The decision of these workers to exit the workforce thus results in a profound redistribution of wealth.
It’s not that Republicans don’t like government to redistribute wealth. They understand that on the economic level, it’s the function of government—take money from some people and give it others. Unless a government is controlled by a dictator or King/Queen (who can funnel taxes to private accounts), it will eventually always spend every penny it takes in (and more). So every government is going to redistribute.
But the right is used to government redistribution taking money from the poor and middle class and giving it to the wealthy and very wealthy. That’s the flow of the cash for the past 30 some odd years. Financing the lowering of taxes on the wealthy by cutting programs redistributes wealth upwards. Privatizing government functions—the polite term for “crony capitalism”—redistributes wealth upwards. Passing legislation that hurts unionization efforts or takes jobs from union members redistributes wealth upwards. Deficit spending financed by bonds bought primarily by rich folk redistributes wealth upwards, especially when it’s done in lieu of raising taxes. In short the entire right-wing program for government since the Reagan years distributes wealth upwards.
The ACA gets the money flowing in the other direction, from wealthy and upper middle class to the poor and lower middle class. That benefit to the lives of 99% of all Americans may be as important as the fact that the new law will extend healthcare insurance to 30 or 40 million people who couldn’t previously afford it.
It also explains why the Republicans are correct when they say the economy will suffer. They mean their economy—the economy for the one percent.