For years, hospital lobbyists have promised that Obamacare’s Medicaid expansion would kick start states’ economies and produce thousands of new jobs. (Expanding welfare always stimulates the economy, right?)
This piece of their Obamacare sales pitch is critical because, according to their calculations, these new jobs will generate the necessary revenue to pay for states’ share of the Obamacare expansion costs. The Arkansas Hospital Association, for example, made a similar guarantee, promising that most of the state’s share would be covered by new tax revenue generated by new jobs.
But now that expansion has been up-and-running for more than two years, the data is starting to paint a clearer picture of the real economic impact. And, believe it or not, Obamacare expansion isn’t living up to the hype.
Non-Expansion States Are Growing Faster Than Obamacare States
From 2011 through 2013, employment in Obamacare expansion states was growing roughly 1.89 percent per year. But since those states expanded Medicaid, employment growth slowed slightly to 1.85 percent. Instead of creating the tens of thousands of new jobs promised by Obamacare advocates, employment growth has actually declined.
Meanwhile, employment in non-expansion states is growing faster than in non-expansion states and has actually accelerated over the last two years.
Bottom line: employment growth has been lagging in expansion states for some time and, despite promises from hospital lobbyists, expansion has failed to reverse this trend. In fact, growth has declined even more in states that implemented Obamacare expansion while non-expansion states continue to see stronger increases in overall employment.
Expansion States Are Hemorrhaging Hospital Jobs
The majority of the promised new jobs were supposed to spring up in the health care sector, specifically at hospitals. But these jobs are nowhere to be found. In fact, many expansion states are worse off than they were before they expanded Obamacare.
Iowa is one such expansion state. There, the Iowa Hospital Association commissioned a study by Regional Economic Models, Inc. to measure the impact of Obamacare expansion. They projected expansion would create 2,400 new jobs by 2020. Specifically, REMI said Iowa would add 529 new hospital jobs in 2014 alone.
Just one problem: it never happened.
Instead of adding more than 500 new hospital jobs, Iowa lost 983 hospital jobs in 2014, the first year of its Obamacare expansion. Meanwhile, their Obamacare-rejecting neighbors in Nebraska gained 544 hospital jobs over the same time period.
Based on partial data, it doesn’t look like things improved much for Iowa in 2015. In fact, it looks like they lost even more hospital jobs.
Similar patterns have played in out other expansion states, including Kentucky and Arkansas. Coupled with an expansion enrollment explosion, the missing revenue from phantom job growth is putting state budgeters in a crunch and leaving taxpayers on the hook.
Welfare Doesn’t Create Jobs. Who Knew?
The Congressional Budget Office has warned for years that Obamacare will hurt the economy and shrink the labor force. As recently as last December, the CBO warned that Obamacare’s Medicaid expansion specifically is a tax on work that discourages Americans from climbing the economic ladder. It looks like they were right.
At the end of the day, welfare programs don’t create jobs or increase economic activity. They do quite the opposite.
State policymakers who are looking to give their local economies a shot in the arm shouldn’t rely on lofty promises from those who profit off of poverty. Instead, they should pursue policies to help able-bodied Americans get back on their feet and off of welfare as quickly as possible. That’s the path to real economic growth.
This article originally appeared at Townhall.com on March 17, 2016.