Sorry, Mr. Puzder: no correlation between exchange premiums and restaurant employment

Jared Bernstein

Jared Bernstein Senior Fellow, Center on Budget and Policy Priorities

My colleague Ben Spielberg made this neat scatterplot today in reference to a claim by Labor Secretary designee Andrew Puzder. Puzder claimed that a “government mandated restaurant recession” was caused by rising premiums in the Obamacare exchanges. The idea is that consumers, after paying for health coverage, didn’t have enough left to go out to eat.

If so, we should see restaurant employment falling – or, at least, growing more slowly – in states where Obamacare premiums rose. But, as the scatterplot reveals, there’s little correlation at all between these two variables (and what there is goes the wrong way for Puzder’s case).

There are lots of reasons for that non-correlation, not least of which is that the vast majority of Americans do not get coverage through the exchanges–only 7% obtain coverage through the non-group market. See this Scheiber/Strom piece in the NYT for more details.

As I said therein: “We see different goals between a business owner trying to hold down costs and a national policy maker who ought to be focused on making sure that the benefits of growth are fairly and broadly shared. For a guy like Puzder, suppressing labor costs is a good day at work. For the labor secretary, that’s not the goal.”

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This was reposted from On the Economy.

Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow.  From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute in Washington, D.C. Between 1995 and 1996, he held the post of deputy chief economist at the U.S. Department of Labor. He is the author and co-author of numerous books, including “Crunch: Why Do I Feel So Squeezed?” and nine editions of “The State of Working America.”

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