About a month ago, the U.S. Bureau of Labor Statistics released 2016 annual average employment data from the monthly Current Employment Survey. It isn’t the most detailed information with regard to local government, but it is the most timely, so I once again put together a series of charts showing the trends.
The data shows that after a period of austerity, local government employment is rising again in New York State. The increases are not large, and in New York City local government employment is still rising more slowly than private sector employment. But in the Rest of New York State the increase in the ratio of private employment to local government has halted. Moreover, elementary and secondary school employment, which soared in the Rest of New York State under former Governor George Pataki’s “everybody onto the payroll to get a pension” policies, is rising again despite (at least according to the latest data I’ve seen) falling school enrollment. And in New York City, private sector (but presumably mostly Medicaid-funded) home health care employment has soared at a pace and to a level that raises questions about what the heck is going on.
The data was downloaded from this source.
If you want to see the actual numbers used to produce the charts, and get the series codes that can be used to download data using the BLS “Series Report” tool, a spreadsheet is here.
As noted, public school employment soared in the Rest of New York State in the 1990s, a time when enrollment was rising as the large “Baby Boom Echo” generation was in its school-age years. Other local government employment also soared during the period ending in 2009. Meanwhile New York City was under austerity, as the New York State legislature directed scarce state school aid away from the city’s children while lavishing Medicaid spending on New York City’s seniors. In the 1990 census the vast majority of city residents age 65 and over were non-Hispanic Whites, while the vast majority of New Yorkers age 18 and under were not. New York City public school employment didn’t rise until the late 1990s, despite rising enrollment. New York City local government employment in other categories fell (except, as I know from other data, for the police).
With the Baby Boom echo generation exiting school, Governor Cuomo’s property tax cap limiting property tax increases (other than those funding debts and pensions) to the inflation rate, and state school aid no longer directed against New York City’s children, local government elementary and secondary school employment fell in the Rest of New York State from 2009 to 2014, before rising slightly the last two years. That more recent rise may be why school districts in the Rest of NY State are once again demanding that NYC’s share of state school aid be cut. Other local government employment merely leveled off in the Rest of New York State after 2014. New York City public school employment started edging up after 2012, with other local government employment rising after 2014.
Despite these recent increases, in the Rest of New York State local government employment is still lower in 2016 than it had been in 2009 – though still far higher than in 1990. In New York City overall local government employment is still lower than it was in 2009 or 1990, though elementary and secondary school employment is higher than in 1990.
How about a comparison with the private sector? Part of the private sector is also substantially funded by the government, notably most of the Health Care and Social Assistance sector. Medicare and Medicaid are the big revenue sources for that sector, and for the better off the income tax subsidy via the exclusion of employer-provided health insurance from taxable income is a big funding source as well.
In New York City, employment in the private Health Care and Social Assistance sector increased by 192,300 jobs from the bad economic year of 1990 to the bad economic year of 2009, while other private sector employment slipped by 15,200. Local government employment fell, with an increase of 11,000 for Elementary and Secondary Schools more than offset by a decrease of 21,500 otherwise.
The Rest of New York State also had a Health Care and Social Assistance sector employment boom from 1990 to 2009, with an increase of 231,600 jobs, even more than in New York City. That sector’s employment increased by about 50 percent in both parts of the state during those years. No wonder by 2006 the continued demand for higher Medicaid spending, and the shift of much of the resulting tax burden to local governments, was such a pressing issue.
But unlike New York City the Rest of New York State also had a local government boom during those years, with Elementary and Secondary School employment up by 77,500 (26.8%) and other local government employment up by 49,900 (19.4%). Under rules the public employee unions ordered the state legislature to pass in 2000, anyone with the connections to get a government job for just five years qualified for a (very small) pension and (very rich) retiree health insurance.
Meanwhile, in the Rest of New York State private sector employment plunged by 122,700 from 1990 to 2009. So how did the rest of the state afford all that local government and non-profit employment? By jacking up property taxes as a percent of the income of local residents there, by sucking more and more money out of New York City to the detriment of city residents, and by sucking more and more money out of the future – with debts, reduced infrastructure maintenance, and underfunded and retroactively increased public employee pensions. New York City’s share of state school aid was slashed as enrollment rose in the 1990s, and funding for the MTA Capital Plan was cut to zero – about where it has been ever since. Money was transferred from the “transportation trust fund” for roads and bridges to other needs almost as soon as it was created, with debt used to pay for infrastructure.
Given that many of those who wrecked New York’s future – Pataki, Giuliani, McCall, Bloomberg, Spitzer (Rockefeller, Lindsay) — did so to curry favor with special interests in the run up to possible or actual runs for higher public office, nothing strikes more fear into my heart than “possible candidate for President Andrew Cuomo.” But at least as of now, one can say that the data shows that the employment trends of the 1990 to 2009 period have moderated or reversed since Cuomo took office.
A comparison of 2009 with 2016 is not like with like, as the former was during a deep recession while the latter might be the peak of a “boom.” At this point, however, we can conclude that (excluding Health Care and Social Assistance) private sector employment has increased by 528,000 (20.5%) in New York City and 206,600 (6.5%) in the Rest of New York State. Health Care and Social Assistance sector employment, however, is still rising as fast as the rest of the private sector in New York City – by 116,100 (20.5%) – and faster in the Rest of New York State – by 82,500 (11.8%). But at least the rest of private sector also added jobs.
Meanwhile, local government employment fell by 26,800 (7.3%) for elementary and secondary schools, and 28,300 (9.2%) for everything else in the Rest of New York State from 2009 to 2016. In New York City the decreases were smaller at 1,900 (1.3%) and 1,200 (0.4%) respectively, but then New York City didn’t have a local government employment boom from 1990 to 2009.
As discussed in other posts using other datasets, the big factor here is soaring pension costs as a result of the huge 1995, 2000 and (for NYC teachers) 2008 retroactive pension increases, all the early retirement “incentives” in between, pension spiking and disability fraud. That cost, shifted to a future that is now the present, has left less money available for local government employment – and public services and benefits – today. Thus a falling level of local government employment relative to private sector employment has not allowed tax cuts. Taxes have gone up. It is just that including their rich (and retroactively enriched) retirement benefits, New York’s average state and local government worker has continued to get richer and richer relative to their average neighbors, who can then afford fewer of them despite high taxes.
In some ways, New York State was just following national employment trends from 1990 to 2016. Health Care and Social Assistance sector soared by about 50 percent in both parts of New York from 1990 to 2009, but the national increase was 77.2%, a difference explained by faster population growth in the rest of the country. Other private sector employment rose by just 12.8% in the U.S. over those years, matching up with the private sector decline here.
While the poor, immigrants and minority groups, and places where they lived, were squeezed from 1990 to 2009, and thus NYC local government employment fell, it was different elsewhere. Local government elementary and secondary school employment increased by 26.8% in the Rest of New York State, and total local government education (including local government higher education) increased by 36.9% in the U.S. as a whole, a difference that may also be explained by population growth elsewhere in the U.S. and the lack thereof in the Rest of New York State. Other local government employment increased by 28.3% in the Rest of New York State (despite very little population growth) and 12.8% in the U.S.
From 2009 to 2016, during this weak recovery, U.S. local government decreased 2.0% in education and 0.9% otherwise. New York isn’t the only place with a pension problem, largely because in many other places taxpayers have paid far less for public employee pensions than the taxpayers of New York City. Health Care and Social Assistance employment increased 15.2% in the U.S, compared with the gains of 20.5% for NYC and 11.8% for the Rest of New York State. And other private sector employment increased by 11.7% in the U.S., compared with the gains of 20.5% for New York City and 6.5% in the Rest of New York State.
Just focusing on the most recent year, one finds that annual average Health Care and Social Assistance sector employment soared by 4.2% in New York City and 3.5% in the Rest of New York State from 2015 to 2016. Other private sector employment increased by just 1.8% in New York City and 0.5% in the Rest of New York State. Elementary and secondary school employment increased by 0.5% in New York City and 0.9% in the Rest of New York State. And other local government increased 0.4% in New York City but was unchanged in the Rest of New York State.
Why are local government gains in the Rest of New York State concentrated in the public schools? Unfortunately, for our elected officials government spending is often less about public services and benefits and more about patronage and high-end public assistance for the connected. But patronage and high-end public assistance is not popular with the natives if they have to pay for it. The increase in elementary and secondary school employment has been paid for with rising state aid, and in the entitlement fuels entitlement world of New York politics, that has led to demands for more state aid. At this point, however, with lower enrollment levels, and given how high NY school spending is already, public funds ought to be shifted to other, neglected needs such as the infrastructure. In that sense the demands for more and more state school aid in general are inequitable.
Looking at the Rest of New York State in more detail, local government employment soared in all major “labor market areas” from 1990 to 2009 and fell in all those areas from 2009 to 2016. The only one of these areas where local government employment was lower in 2016 than it had been in 1990 was metro Syracuse at 400 lower. (New York City was 13,600 lower).
Albany-Schenectady-Troy was 4,500 higher, metro Binghamton was 700 higher, Buffalo-Niagara Falls was 2,300 higher, metro Rochester was 10,900 higher, and Utica Rome was 3,600 higher. The Lower Hudson Valley was 13,900 higher.
In Nassau-Suffolk, local government employment was 22,100 higher in 2016 than it had been in 1990. Alphonse D’Amato lives.
How much private sector employment, excluding the substantially government-funded Health Care and Social Assistance sector, do New York City and the Rest of New York State have to support their local government employment?
The U.S. average was 7.2 private sector workers (with the exclusion above) per local government employee in 2016, up from 7.0 in 2006, before the Great Recession.
New York City was at 6.8 private sector workers per local government employee in 2016, lower than the U.S. average but not high considering that most of the U.S. does not have a large public transit and public housing system, and much of it does not have public water, sewer or solid waste collection. That is up from just 5.7 in 2006 and 4.9 in 1993, the last time NYC was on the brink of bankruptcy.
The Rest of New York State had just 5.5 private sector workers per local government worker in 2016, an improvement from the low of just 4.7 in 2010. However, from 2015 to 2016 the ratio of private sector workers to local government workers failed to increase for the first time since 2009.
Getting back to the Pataki local government boom, why did New York City’s state legislators, led by the convicted Sheldon Silver, vote for budgets that shortchanged New York City’s children and defunded New York City’s infrastructure? Why the local government boom elsewhere, and the local government squeeze in New York City? What was received in exchange?
Spending on New York State’s expensive Medicaid program has long been concentrated in New York City. In the 1990s so were the state’s senior citizens – the parents the post-WWII generations had left behind when they moved to the suburbs. As mentioned, in 1990 most NYC seniors were non-Hispanic whites and most children were not. I recall that in the 1990s my wife’s grandmother was living in a senior citizen complex on Shore Road in Bay Ridge and volunteering to deliver “meals on wheels” to her needy neighbors. She was upset to find herself delivering meals to those who were less disabled than she was, but didn’t want to be bothered cooking, since after all it was free and they were entitled to it. This really bothered her, because her great grandchildren were living in Brooklyn and they were taking the sand out of the sandboxes in the playgrounds at the same time, because they couldn’t afford to maintain them. Fewer members of the generations now moving into old age are likely to be bothered by things like that.
Moreover, many of the very costly Medicaid-funded services were and are provided by profitable social service non-profits owned and operated by NYC’s state legislators, their relatives, their associates. Charities no one would ever donate to. Or, as I came to call them, the non-profiteers. And there have been repeated instances of Medicaid fraud in New York City, with quite a few state legislators getting caught.
So with demands for New York City’s share of state school aid to be cut, and the schools possibly once again being used as jobs program in the Rest of New York State, I wondered if the old deal might be re-asserting itself?
Private Home Health Care industry employment has been soaring, not only in New York City but in many places, for some time. Much of it is funded by Medicare and Medicaid – specifically by Medicaid in New York City. By now, however, the cumulative and recent gains are becoming so large as to be almost unbelievable.
New York City employment in this industry tripled from 2004 to 2016, an increase of 91,700. Home Health Care employment increased in the Rest of New York State as well over those 12 years, but by only 17,700 — New York City accounted for five of six jobs added in this industry the state. New York City’s share of the statewide total employment in the industry increased from 56.2% in 2004 to 72.5% in 2016. In New York City the employment gains are accelerating, with an average increase of 5,500 per year from 2004 to 2012, 11,300 per year from 2013 to 2015, and 14,000 in 2016. By 2015 there were about 1.6 Home Health Care industry employees for every 100 city residents, of all age groups.
This despite the fact that the population of the Rest of New York State was getting older, as young workers moved away from Upstate New York and the Downstate Suburbs aged in place. And New York City’s population has been getting younger, as millennials and immigrants pour in and occupy housing units previously occupied by dying off seniors. Most Home Health Care employment is for the homebound elderly, as an alternative to a nursing home. But New York City accounted for just 38.0% of state residents age 75 and older in 2015. Some of it is for the sick. In the 1980s and early 1990s, home health care aids may have been visiting city residents dying of AIDS. That, too, is much less common today. New York City’s seniors are more likely to be poor. That would affect the percent that need to have their home health care paid for by Medicaid, but not the percent that need home health care, and thus Home Health Care industry employment.
Like demands for rising school funding despite stagnant to falling enrollment, New York City’s home health care boom raises questions. Questions I wish some journalist(s) would pursue. What is going on?
One possibility is a data error, with New York City-based agencies providing home health care aides for people in the suburbs as well, but reporting all the employment back at their New York City headquarters. A second possibility is that home health aids previously misclassified as self-employed workers are now being counted as employees, and thus included in the Current Employment Survey, something that would be the opposite of the overall trend in the NYC labor market.
The third possibility is a jobs program, and/or a scam. With agencies recruiting seniors for services that might be nice to have but aren’t really needed, for which they are not really eligible, on the grounds that those services are “free” because Medicaid pays. And providing jobs to home health care aids, with a little (or actually a lot) of vigorish for the agencies for each one.
Or perhaps worse, with politically connected NYC agencies getting paid for services not rendered by employees who do not actually exist to seniors who don’t exist either. It wouldn’t be the first time something like this happened in New York.