Health care vies with elementary and secondary education as the largest destination for federal and state government spending. In fact, when I added it up in 2006 the federal, state and local governments were already paying for 75.0% to 80.0% of third party (insurance and public program) health care expenditures nationwide, which is to say expenditures other than co-payments and services people pay for themselves in cash (such as cosmetic surgery). Directly (Medicare, Medicaid, the VA Hospital system) or indirectly (health insurance purchased on behalf of civilian public employees and their families, the exclusion of employer funded health insurance from taxable income, other tax breaks).
Since then the population has aged, leading to more Medicare and Medicaid spending, Medicaid has been expanded to more working people, and Obamacare has added another form of indirect federal support for private health insurance. For all the discussion of “socialized medicine,” here in the U.S. the government share of third party health care expenditures is probably up to 85.0% or so, and as a percent of GDP it probably exceeds the cost of the entire health care system in developed countries.
Health care and social services, however, are provided by the government primarily through payments to private sector organizations, generally non-profits in New York City and throughout the Northeast. Therefore in this, the fifth post based on my tabulation of state and local government employment and payroll data from the 2017 Census of Governments, data on related private sector organizations from the Bureau of Labor Statistics will take center stage. And this analysis features the most shocking trend I have found so far.
The first post in this series, which explains where the data comes from and how it was tabulated, is once again here.
It includes spreadsheets with data for far more places than I could squeeze into these function-by-function posts, long as they are, into the re-organized tables, and into the charts. Including data on public employment and payroll for local government in every county in New York State and New Jersey.
A spreadsheet with the reorganized table and many of the charts used in this post is here.
And here is a picture of a summary table from that spreadsheet.
In order to do the analysis and the calculations for some of charts, I downloaded year-by-year population-by-age data from the Census Bureau’s inter-censal estimates program, for the U.S., New York State, other states, New York City (and the Rest of New York State by subtraction – in case the entire portion of the state outside New York City).
And for similar areas, 2007 and 2017 poverty data from the Census Bureau’s American Community Survey.
The discussion begins with hospitals, public and private, and outpatient health care in offices and clinics. As in the case of higher education, the Blue State vs. Red State divide with regard to public vs. private hospitals is the opposite of what one might expect. In the Northeast, non-profit health care organizations were well established before the advent of public hospitals. There is no public hospital employment in Philadelphia or Boston, while Charlotte, NC has one of the biggest public hospital systems in the country. Public hospital employment is substantial in most of the Southeast, and in Texas.
New York City and adjacent counties are an exception in this part of the country. In March 2017, New York City local government hospital employment totaled 455 full time equivalent workers (full timers plus part timers converted to full timers based on hours worked) per 100,000 city residents. That is well more than double the U.S. average of 185.
The average for the Downstate Suburbs was 156, almost as high as the U.S. average even without any employment in the category in Putnam, Rockland and Suffolk Counties. It was 218 full time equivalent public hospitals workers per 100,000 residents in Nassau County, and 374 in Westchester County. Attempts to privatize Nassau and Westchester medical centers failed, and they ended up back with the county governments.
Most of the Upstate Urban Counties have no local government hospitals employment, but the average for these counties as a group is 89 FTEs per 100,000 residents – due primarily to the 347 per 100,000 residents in Erie County (Buffalo). The same pattern holds for the Rest of New York State – local government hospitals are prominent in a few counties, but absent in most. The average for those counties as a group is 69 FTE employees per 100,000 area residents.
It is hard to find counties, among those I tabulated for comparison, that have higher local government hospital employment per 100,000 residents than NYC. Compared with the 455 FTEs in NYC, Broward County in Florida has 994, Miami-Dade County in Florida has 726, San Francisco has 400, Bexar County (San Antonio) has 351 and Dallas County has 438. The average for North Carolina is 540. Not shown on the chart is Mecklenburg NC (Charlotte) at 3,106 local government hospital employees per 100,000 county residents. Counties are small in the Southeast, and the Carolinas Medical Center serves a far greater service area than just Mecklenburg County, with 18 hospitals, many in surrounding counties.
While only some counties have local government hospitals, every state has state hospitals, which generally care for the mentally ill. There are exceptions – Upstate Medical Center in Syracuse and Downstate Medical Center in Brooklyn are general hospitals, like most local government hospitals. State hospitals are the third largest state government employers by function, behind colleges and universities and prisons. The U.S. average was 134 FTE state government hospital employees per 100,000 residents. New York State was significantly above average at 223, as was Connecticut at 179 and North Carolina at 230.
Florida, which has the lowest state and local tax burden as a share of its residents’ personal income of any state, has virtually no state hospital employment – just 19 pr 100,000 people. The care of the mentally ill there is apparently not good.
Above average in public hospital employment, New York City is also above average in private hospital employment, according to Employment and Wages data from the Bureau of Labor Statistics. In this data each worker counts equally as one employee, whether part time of full time. In 2017, New York City had 1,870 private hospital employees per 100,000 city residents, above the U.S. average of 1,543, but below the averages of 2,091 for the Downstate Suburbs and 1,973 for the Upstate Urban Counties.
The Rest of New York State is about average at 1,561, but many people who live there probably travel to hospitals in the Upstate Urban counties for services. But New York City’s private hospitals advanced care for people from outside the city as well. Outside the country, in fact, as people from other parts of the world travel here for advanced surgeries. New Jersey is below average at 1,679 private hospital employees per 100,000 residents, as is Fairfield County at 1,416.
Other major cities that have hospitals that serve a national or global health care market have even more private hospital employment, relative to their populations, than New York City. The 1,870 private hospital employees per 100,000 people for NYC compares with 3,789 for Philadelphia, 2,286 for Cook County (Chicago), 2,927 for Hennepin County (Minneapolis), even though the Mayo Clinic is elsewhere, and 11,503 for Suffolk County (Boston). Because of this broader market, while public plus private hospital employment in NYC seems to be well above the U.S. average relative to the population of NYC alone, we can’t be sure NYC hospitals are overstaffed in reality.
Meanwhile, New York City’s private employment in outpatient medical care — the offices of physicians, offices of dentists, offices of other health practitioners, outpatient care centers, and medical and diagnostic laboratories industries combined — equaled just 1,491 per 100,000 city residents. That is well below the U.S. average of 1,800, the Downstate Suburbs at 2,185, the Upstate Urban Counties at 1,977, New Jersey at 2,066, Fairfield County at 2052, and the Rest of Connecticut at 2,116. The Rest of NY State is below both NYC and the U.S. average at 1,405.
Adding it up, New York City’s private health care employment in total is at about the U.S. average per 100,000 residents, but it is more concentrated in hospitals than the U.S. as a whole. Fairfield County is also about average, with the Rest of New York State lower, but all the other areas charted much higher.
The big push in health care during the past two decades has been to move some less-intensive activities out of expensive hospitals in general, and emergency rooms in particular, into less expensive settings such as outpatient surgery centers and urgent care centers. From 1997 to 2017 private outpatient health employment per 100,000 residents soared just about everywhere, with increases of 44.5% for the U.S. as a whole, 46.7% for New York City, 55.6% for the Downstate Suburbs, 57.6% for the Upstate Urban Counties, 55.4% for New Jersey, 39.5% in Fairfield County, 47.6% and in the Rest of Connecticut. The increase was 46.7% in North Carolina, and 52.3% in Texas.
In the rural and small city and town Rest of New York State, however, the increase was just 18.4%. The population of this area, moreover, is shrinking. Private outpatient health care employed 31,976 in the Rest of New York State in 1997, and 33,571 in 2017, a relatively small gain.
With more poor people directed to other health services and private hospitals, and a continual shortage of funds, the New York City Health and Hospitals Corporation has had to downsize relative to the city’s population. New York City’s local government hospitals employment fell from 522 employed per 100,000 city residents in 1997 to 500 in 2007 to just 455 in 2017. The employment total was 39,200 full time equivalent in March 2017, down from 40,560 in 1997, even as the city’s population increased substantially.
Surprisingly, however, downsizing local government hospital employment relative to population does not appear to the national norm. The U.S. average has barely budged, at 189 FTEs per 100,000 residents in 1997, 190 in 2007, and 185 in 2017. There has been some shrinkage in other “Blue State” areas, with a decrease from 178 in 1997 to 116 in 2017 in Cook County (Chicago), 230 to 194 in Los Angeles County, and 629 to 400 in San Francisco County. In North Carolina, however, there was an increase from 231 to 540. In Broward County, Florida there was an increase from 490 to 994. In Dallas County the increase was from 319 to 438.
Within New York, Nassau and Westchester Counties were at about the same place in 2017 that they had been in 1997, but Erie County (Buffalo) local government hospital employment per 100,000 residents rose to 357 from 241, with most of the increase during the 2007 to 2017 period.
One finds the same pattern for private hospital employment per 100,000 residents. It has continued to increase, or remain sable, in most places and for the U.S. as whole, despite the push to provide more health care in outpatient settings. In the Downstate Suburbs private hospital employment soared from 1,449 per 100,000 residents in 1997 to 2,091 in 2017. One also finds larger increases in Massachusetts and Minnesota, presumably due to people from elsewhere traveling to those states for hospital care. Given the increase in Minnesota, it is likely the Mayo Clinic is absolutely booming.
In New York City, on the other hand, private hospital employment increased from 1,844 per 100,000 city residents in 1997 to 1,972 in 2007, but then fell back to 1,870 in 2017.
Fifteen to 25 years ago the Greater New York Hospital Association, the lobbying organization for private hospitals here, in alliance with Local 1199, the hospital worker’s union, were the most powerful – and selfish and entitled – interest group in New York State. Each year they demanded double-digit increases in state and local funding via New York State’s uniquely expensive Medicaid program, and ran commercials threatening to kill our babies if they didn’t get it. They funded incumbent politicians from both the Republican and Democratic parties, threatening to switch alliances if they didn’t get what they wanted.
When I first started tracking data from the Centers for Medicare and Medicaid on Medicaid spending by state, New York State’s spending per beneficiary on hospital services was nearly double the U.S. average. Its spending per beneficiary on physicians, on the other hand, was nearly the lowest in the country, right down there with West Virginia. Preventive care for the poor was terrible in NYC, and despite sky high Medicaid spending overall, NYC life expectancy was below the U.S. average.
For advocates of a single-payer health care system there is one objection they need to face, one reality they have to overcome. What if it were to become like New York State’s Medicaid program, massively expensive with funding allocated to different parts of the health care system based on campaign contributions and not health care needs? (The other example to overcome is the UK, where people seem to have decided that since health care is “free” they shouldn’t have to pay for it taxes either, leaving it chronically underfunded
Over the past 13 years or so, however, state politicians have rebelled against their former overlords, and NYC’s private hospital industry was forced to restructure. Total employment has been flat at around 150,000 even as the city’s population has grown, and a number of unprofitable hospitals have been forced to close. Manhattan hospitals with sterling reputations have bought up others to form networks, now extending to the suburbs so those who once traveled to Manhattan for care can now get the same treatment locally. Perhaps that’s the reason for the increase in private hospital employment there.
A couple of weeks ago, the New York Times reported that New York State faces a $1.7 billion budget over-run in its Medicaid program.
It has decided to simply borrow the money and pay it back with budget cuts in the following fiscal year – when tax revenues might be falling due to a recession. With local governments (New York City and counties elsewhere) required to pay a substantial share of Medicaid hospital costs in New York State, there are probably local budget crises lurking as well. The Greater New York Hospital Association had made a $1 million donation to New York State’s Democratic Party, and (the Times implies) in exchange the state legislature and Governor had agreed to increase Medicaid reimbursement rates by 2.0% – a move officials expect will cost the state roughly $140 million a year in extra payments to hospitals and nursing homes. Is that the cause of the $1.7 billion shortfall?
The New York Times, however, also reported that this was the first increase in Medicaid reimbursement rates since 2008. Since 2008! That’s a 16.6% cut relative to inflation from 2008 to 2018, a time when the cost of virtually every other public service in New York soared relative to inflation. Notably New York City’s public schools, now that the United Federation of Teachers and New York State United Teachers have taken the place of Local 1199 and the Greater New York Hospital Association as the most powerful and selfish special interest in the state.
I’ll show a more likely cause of the current Medicaid disaster later in this post.
There is, however, one type of hospital employment that is being downsized nationwide, and just about everywhere. State hospital employment, hospitals serving the mentally ill. While relatively high in New York State in March 2017, when measured per 100,000 state residents, it was down 16.7% from 1997. The national decrease was 22.1%, with declines of 21.2% in New Jersey, 44.1% in Connecticut, 58.4% in Texas, and 32.9% in Illinois. The decreases for Massachusetts and Florida are so steep that I suspect they might represent privitization rather than elimination.
There was an increase of 37.5% in California, where it continues to be reported that mentally ill people are bused in from other states for services on California taxpayers’ dime.
A Nevada jury put the state and a former mental hospital administrator on the hook Thursday for class-action damages that could range from about $9 million to more than $22 million for putting patients on buses in Las Vegas for one-way trips to cities around the country… Brown, then 48, and diagnosed with psychosis, told reporters in Las Vegas in 2013 that he arrived “homeless, confused and anxious” in Sacramento after a 15-hour bus ride from Las Vegas. After a day on the streets, hospital emergency room officials found him space at a psychiatric hospital. Brown was later reunited with his daughter in North Carolina.
Mean public hospital payroll per employee will be discussed briefly, because nothing really jumps out at me other than the fact that it is high in California and not high in New York.
In 2017, according to the Bureau of Economic Analysis, the mean earnings (including benefits) per private sector worker in New York State was 12.0% above the U.S. average. In March 2017, according to the Census of Governments, the mean payroll per state government hospital worker in New York State was 11.4% above the U.S. average.
In 2017, according to the Bureau of Economic Analysis, the mean earnings (including benefits) per private sector worker in the New York-NJ metropolitan area was 21.4% above the U.S. average. In March 2017, according to the Census of Governments, the mean payroll per local government hospital worker was just 8.5% above the U.S. average in New York City, and 28.1% above average in the Downstate Suburbs. Both mean private sector earnings and mean local government hospital payroll per employee were below average in Upstate NY.
The second government function to be discussed in this post is social services. The state and local government workers who administer social service programs are assigned to the “Public Welfare” function in Census of Governments data. Public workers in this function also administer Medicaid. As in the case of health care, actual social services are generally provided by private sector organizations, often non-profits, under contract, even if publicly funded. That is certainly the case for New York City where contracts – tabulated as “other than personnel services” in the city budget document that is the basis of this chart – account for a large share of total health and social services expenditures.
As for the public employees themselves, the division of responsibility between state and local government varies from place to place.
In New York State, state government Public Welfare function employees generally just pass off money to New York City and the state’s counties, who actually administer social services services at the local level. In Connecticut, Massachusetts and Texas, on the other hand, it is the state government that accounts for most of the state and local government employment in Public Welfare category.
Adding state and local government together, New York State had 242 FTE Public Welfare employees per 100,000 state residents in March 2017, well above the U.S. average of 160. New Jersey (197), Connecticut (199), Pennsylvania (220) and California (200) were also above the U.S. average, with Massachusetts (147) below average and Texas (103) and Illinois (109) far below. Minnesota had 263 FTEs per 100,000 in the category, more than New York State.
New York City’s local government Public Welfare employment equaled 260 FTEs per 100,000 city residents in March 2017, compared with just 106 in the Downstate Suburbs and 202 in the Upstate Urban Counties.
The Rest of New York State, however, was higher than NYC at 313 per 100,000 residents. The reason appears to be that more social services are provided directly by local government workers, and fewer by non-profit and private organizations under contract, in these rural and small town areas.
The extent to which the mean payroll per employee for New York’s local government Public Welfare employees is more or less than the U.S. average matches up with pretty well with the private sector. Then again, social services workers tend to be low-paid nationwide. And to the extent to which NYC public employees are overpaid compared with the private sector, that is almost never in cash, which everyone can see. And almost always in the form of excess staffing and fewer hours (actually) worked per day, fewer days worked per year, and fewer years until a longer and richer retirement than anyone else.
With regard to private employment in the Social Assistance sector, in New York City and in the U.S. as a whole the Services for the Elderly and Disabled industry accounts for just under half of the total. This industry will be discussed in detail later, along with the related Nursing and Residential Care industry and the Home Health Care industry, each considered part of the Health Care sector.
For the rest of private sector Social Assistance, the rural and small town city Rest of New York State had 679 employed per 100,000 people, slightly higher than the U.S. average of 615. New York City was double the average at 1,142, with the Downstate Suburbs and Upstate Urban Counties also above average at 799 and 985 respectively. New Jersey, Fairfield County and Connecticut were also high at 760, 1,080 and 975, with other parts of the Northeast high as well.
Not that while the two measures of employment used for the public and private sectors are not directly comparable, private Social Assistance employment (excluding Services for the Elderly and Disabled) is much, much higher than full time equivalent state and local government employment.
Low tax Texas and Florida were below average in private Social Assistance employment per 100,000 people, at 517 and 451. California was also below average at 492, though San Francisco, dealing with an influx of homeless people, was far above average – and higher than NYC — at 1,224 per 100,000 city residents.
Relative to its large low-income population, however, New York City is not, fact, the regional capital of social work. In 2017, its private Social Assistance sector employment (excluding Services for the Elderly and Disabled) was 75.4 per 1,000 poor people age 64 or younger (as measured by the American Community Survey). That is well above the 52.6 for the U.S. as a whole, but lower than the 87.1 for the portion of New York State outside New York City, the 88.0 for New Jersey, the 122.3 for Connecticut, the 121.1 for Massachusetts, and the 112.4 for Minnesota.
The areas with more Social Assistance employment per 1,000 poor people have a below average poverty rate in common. It appears that having fewer poor people means a state or part thereof can provide more attention to each of them. California had just 42.1 private Social Assistance employees per 1,000 poor people under age 65, and Texas had just 34.4. But most of the states I tabulate for comparison with NYC have below average poverty.
Despite the opioid epidemic, and a rising death rate and falling life expectancy among those age 60 and younger, I would have predicted that private Social Assistance employment (excluding Services for the Elderly and Disabled) per 1,000 poor people under age 65 would have fallen between 2007 and 2017. Much of the funding for these services is provided by the federal government, which had social spending (other than on seniors) constrained by a sequester during these years. Soaring public employee pension costs, and weak state tax revenues in the wake of the Great Recession, sent plenty of state governments looking for politically powerless people whose services could be cut. In Illinois, the state was years behind in paying social service non-profits for services they had already provided, and froze reimbursement rates.
So it was a pleasant surprise to see that private employment in this category, per 1,000 poor people under age 65, actually increased from 2007 to 2017 nationwide, in New York City, in all the other areas of New York State combined, and even in Illinois. If fell in New Jersey and Connecticut, but remained above the U.S. average.
The categories of private health and social services employment where New York City is truly extreme are those for the elderly. Adding up the Nursing Home and Residential Care industry, the Home Health Care industry, and the Services for the Elderly and Disabled industry, New York City had 3,659 employed per 100,000 city residents, close to double the U.S. average of 1,985. Other parts of NY State were also above average but not close to NYC, with the Downstate Suburbs at 2,513, the Upstate Urban Counties 2,606, and the Rest of New York State at 2,528.
New York City’s employment is sky high in these categories as a group despite the fact that its Nursing and Residential Care employment, at 876 per 100,000 city residents, is below the U.S. average of 1,023, and far below the Downstate Suburbs at 1,349, the Upstate Urban Counties at 1,676, and the Rest of New York State at 1,561, along with New Jersey (1,067), Fairfield County (1,347), the Rest of Connecticut (1,861), Massachusetts (1,523) and Pennsylvania (1,592).
New York City’s private employment per 100,000 city residents in the Services for the Elderly and Disabled industry is 1,026, about double the U.S. average of 529. And its employment in the Home Health Care industry is 1,757 per 100,000, more than four times the U.S. average of 433.
There is some overlap between these two industries.
According to the North Atlantic Industry Classification System, the Services for the Elderly and Disabled industry comprises establishments primarily engaged in providing nonresidential social assistance services to improve the quality of life for the elderly, persons diagnosed with intellectual and developmental disabilities, or persons with disabilities. These establishments provide for the welfare of these individuals in such areas as day care, non-medical home care or homemaker services, social activities, group support, and companionship.
While the Home Health Careindustry comprises establishments primarily engaged in providing skilled nursing services in the home, along with a range of the following: personal care services; homemaker and companion services; physical therapy; medical social services; medications; medical equipment and supplies; counseling; 24-hour home care; occupation and vocational therapy; dietary and nutritional services; speech therapy; audiology; and high-tech care, such as intravenous therapy.
So government-funded personal care, homemaker and companion services could be provided by establishments in either industry. But actual skilled health care, for which Medicare, Medicaid and health insurance rates are presumably higher, should only be provided by Home Health Care organizations.
Not all workers in what I have designated “senior-related” industries are in fact serving seniors. We all eventually become disabled and require care later in life, unless we die quickly, but some are disabled sooner, or their entire life. There is a group home for the mentally disabled at the bottom of my block, presumably classified in the “Residential Care” portion of the “Nursing and Residential Care” industry. And not all services in these industries are paid for by Medicaid. Medicare, private insurance and individuals pay for some of it.
Medicaid-funded spending on services for seniors, however, is set to explode, the way state and local government spending on public employee pensions has exploded, for three reasons.
First, people are far more likely to require these types of services when they pass age 75, with the chance of needing services rising for each additional year. The Baby Boom generation started being born in 1947, and its first members will reach age 75 in 2022. From that point on, the demand for the sort of services provided by the industries in the chart is likely to soar for demographic reasons alone – continually for at least a decade and perhaps for 20 years – before it levels off.
Second, most personal care for declining seniors has historically been provided by family members. But the Baby Boomers, to a far greater extent than prior generations, forsook obligations to family, including their own children, in favor of sexual pleasure and personal fulfillment. It is those later-born generations, disrupted in childhood and far worse off on average than the Boomers themselves had been at the same age, to whom the Boomers may later turn for help in old age. Thus leading to an onrushing disaster I first described five years ago, in this post.
“What about my needs!” Tick, tick, tick.
Third, Baby Boomers had, on average, about as much respect for meeting community responsibilities as they had for family responsibilities, and pushed an agenda of lower taxes on themselves and more spending for themselves, including retroactive increases in public employee pensions and the Medicare prescription drug benefit. They will likely seek to force their progeny to meet their needs through increases in government spending on their services, but they will have left the federal, state and local governments broke due to their past tax cuts. Taxes will be rising and other services cut for the next 20 years even without rising costs for care of the seniors.
Finally, Baby Boomers are an entitled generation, and the services seniors actually need to receive is difficult to establish. Over time it becomes first inconvenient, then difficult, then agonizing, and finally impossible to care for oneself. If is well nigh impossible for someone on the outside to fairly evaluate what a senior is facing on the inside, so the extent of services provided often corresponds with the extent of entitlement. This is something I first discussed in my series on Equity and Eligibility on Room Eight back in 2007.
With this issue specifically mentioned at the time.
It is not hard to imagine unnecessary benefits being provided for some, even as real needs not being met for others, depending on politics.
With the entire nation facing a future crisis in custodial senior care, starting very soon, New York State can hardly afford, in addition, the kind of corruption and fraud that has typically been a large part of its Medicaid program, dating back to the Medicaid Mills that sprung up to provide (or perhaps not provide) unnecessary services and bill the program soon after it was established in the 1960s. Corruption that has sent dozens of state legislators to jail.
So I decided to examine this issue in more detail, with a time series of employment in these “senior-related” industries per 1,000 people ages 75 and over for the U.S., different states, and NYC and the Rest of NY State separately. What I found is shocking.
Despite Nursing and Residential Care employment that was (only) slightly below average per 1,000 people age 75+, New York City had 635 employed in the three senior-related industries combined per 1,000, well more than double the U.S. average of 303. NYC was 8.3% below the U.S. average for Nursing and Residential Care, but double the U.S. average for Services for the Elderly and Disabled and about five times the U.S. average for Home Health Care.
The portion of New York State outside New York City was also above average at 344, as was California (411), Connecticut (361), and Massachusetts (456). But none were close to New York City. New Jersey was below average at 272.
In the U.S. as a whole, the presumably lower cost Services for the Elderly and Disabled industry employs more people than the Home Health Care industry. That is also true in the Rest of NY State, Connecticut, Massachusetts, Pennsylvania, Vermont, California, Illinois and Minnesota. In New Jersey, on the other hand, Home Health Care employment is nearly double employment in Services for the Elderly and Disabled. In New York City, it is also nearly double.
Many people from the Northeast move to Florida or North Carolina when they retire, to avoid high Northeastern taxes. I hope they aren’t expecting the governments of those states to meet their needs when they get much older and their health and ability to live independently declines. North Carolina was below average in employment for the three “Senior Related” industries combined, at 239 per 1,000 people age 75 and over. Florida was rock-bottom at 149.
The next few charts will keep the same scale, topping out at 650, just above the 2018 level for NYC.
For the U.S. as a whole, employment in the three “Senior-Related” industries combined increased 39.2% from 2001 to 2016, when measured per 1,000 people age 75 and over. Meaning today’s seniors are more likely to be receiving these services than prior generations, now passed away, once did. The Silent Generation that preceded the Baby Boomers, the generation now ages 73 to 89, was the first to get divorced in large numbers, and they and the early Boomers are the richest generations in U.S. history. So the possible substitution of purchased care senior care for family senior care is not unexpected. But Senior-Related employment per 1,000 people age 75 and over has recently leveled off and started to slip nationwide. At home care appears to be actually substituting for nursing home and residential care, limiting the total.
Despite the recent leveling off, however, while the U.S. population age 75+ increased 29.8% from 2001 to 2018, employment in the three “Senior-Related” industries increased by 131.1%, more than doubling.
In New York City, on other hand, employment in these industries is still soaring, even though it was much higher to begin with. There was a 58.8% increase in employment in the Senior Related industries per 1,000 people age 75 and over from 2001 to 2018, with the pace of increase that is accelerating every year. Especially for Home Health Care, which might be an “upcode” for reimbursement purposes compared with the type of services actually provided. From 582 employed per 1,000 people ages 75+ in 2017, these industries collectively employed 635 per 1,000 people age 75+ in 2018, a 9.1% increase in just one year.
And Current Employment Survey data received from the New York State Department of Labor shows the increase continuing in 2019, with the Home Health Care industry accounting for one-third of NYC’s private sector employment gain in the 12 months ending in August.
Taking the 2001 to 2018 period has whole while NYC’s population age 75+ increased by just 21.4%, but employment in the three “Senior-Related” industries combined increased by 212.9%, more than tripling.
The State of New York sets the rules for Medicaid in New York State, and therefore the rules in place in New York City are also in place in other parts of the state. And while the poverty rate for New York City’s seniors is well above the U.S. average, in other parts of the state it is well below average. So seniors elsewhere have more of their own resources to purchase these kinds of services – if they think they really need them. And yet in the rest of NY state employment in the three “Senior-Related” industries combined is not only not much higher the U.S. average, relative to the population age 75 and over, but it is also going up more slowly, with a 31.1% increase from 2001 to 2018.
The portion of NY State outside NYC already had a lot of people age 75+ back in 2001, and its population in that age category has increased just 15.1% since. Employment in the Senior-Related industries increased by 40.2%.
Meanwhile, relative to its total population age 75+, low-tax Florida’s employment in the “Senior-Related” industries isn’t just low. It has been edging down since 2010, from 164 per employed per 1,000 people that year down to just 149 in 2018. Once their money and their health and mental acuity is gone, and they are no longer a net fiscal benefit to Florida, perhaps the former “Snowbirds” will receive the same treatment as Nevada’s mentally ill, and end up dumped off a Greyhound at the Port Authority Bus Terminal.
Tired of Florida, some retirees from the Northeast have been heading to North Carolina. The so-called “half-backs.” That state’s population age 75+ soared 52.3% from 2001 to 2018, but after the financial crisis the state has constrained services for them. Employment in the “Senior-Related” industries per 1,000 people age 75+ peaked at 304 in 2007, and fell to 239 in 2018, a decrease of 21.6%.
Recently, in fact, there were decreases in many states, due either to a shortage of public money or perhaps, as unemployment fell, a shortage of workers for these traditionally low-paid industries. In some state such as Ohio the decrease started after 2016, in others it goes back further.
Illinois long had a state and local tax burden that was below the U.S. average, despite above average services and extensive corruption. Generation Greed achieved this by underfunding (while spiking and retroactively enriching) public employee pensions, running up debts, and selling off public assets and blowing the proceeds short-term. Now taxes have soared, but all retirement income is exempt from Illinois state income taxes, so the generations than benefitted from lower taxes in the past is unaffected. But employment in the “Senior-Related” industries started falling in Illinois, relative to the population over 75 and over, in 2016 – long after socials services for children had been cut.
Now I have to change the scale, because within New York City “Senior-Related” employment is sky-high in one borough even compared with the others. Especially in the soaring Home Health Care industry.
And it is soaring even faster there, especially after 2015.
Based on history, when I see this I assume the worst. If anyone isn’t in on the deals and is tempted to examine this further, and someone certainly should, the data behind those charts, with data and charts for additional states, is here.
Is this massive increase in employment being funded by soaring Medicaid expenditures? Once, I would have downloaded data on Medicaid expenditures and beneficiaries by state, for different types of service, including home health care, personal care, nursing home care, and intermediate care facilities (and hospital care and care by physicians), and for different age group, to answer that question. I once tabulated that data every year or two. But since 2012 the Centers for Medicare and Medicaid have stopped making such data available to the general public with regard to Medicaid. “No public facing data.” We can pay for it, but we can’t see what we’re paying for, compared with the past, and compared with other states. Why?
They seem to have gotten away with it, as only I have raised the issue. The question is on whose behalf is the data not being provided? We have clearly passed the point of peak transparency in this country, and not just with regard to Donald Trump’s tax returns.
The way things are going, the federal, state and NYC governments will not only be jacking up taxes on later-born generations (that are paid less), but also slashing every public service other than contributions to public employee pensions and retiree health insurance, Social Security, Medicare, and these “Senior-Related” industries. All with drastically lower benefits, and impoverishment and ill health in old age, for later-born generations that will be forced to pay more for them while working. All to benefit the generations now taking cruises with the savings from the Trump tax cut, and the public employee pensions retroactively enriched around the year 2000 (or in New York State, continuously right to the present day).
One example of something later-born generations have already forgone is local government employment in the Housing and Community Development function, including public housing. Like the city subway system, this was one of the first dominos to fall as a result of long-term disinvestment. And it is a government function that is highly concentrated in NYC relative to other places.
In March 2017, according to the Census of Governments, New York City had 154 full time equivalent local government Housing and Community Development workers per 100,000 people, vastly above the 31 average for the United States. The averages were just 13 for the Downstate Suburbs, 33 for the Upstate Urban Counties, 8 for the Rest of New York State, 34 for New Jersey, and 47 for Fairfield County.
Like public hospitals, public housing is something some places have, but most places do not. Even compared with other urban counties, however, it is hard to find one that even approaches the NYC figure of 154 local government Housing and Community Development workers per 1000,000 residents. In March 2017 the District of Columbia, at 137, and Suffolk County (Boston), at 134, came closest among the places I tabulated. The second highest among New York State counties was Onondaga (Syracuse), at 54.
Most public housing was built from the late 1940s to the early 1970s. The federal government paid for the construction of the buildings, and provided an operating subsidy if required, but expected local housing authorities to only rent to the poor, and to charge them no more than 25 percent (later increased to 30) of their income in rent. Most public housing was located in older central cities, as the suburbs didn’t want the poor, and concentrating the poor in high rise buildings in declining areas of declining central cities is generally considered to have been a public policy disaster. Public housing development essentially halted after 1973, with the federal government providing housing assistance to the poor primarily through Section 8 vouchers to, subsidize rents in private apartments. Unlike other “entitlements,” however, the budget has never been large enough to provide Section 8 subsidies to everyone theoretically eligible. There is a waiting list that lasts for years.
When new, public housing was initially considered a step up from the aging tenements where most working class people lived. Tenants were screened, expected to have jobs, and also expected to be good housekeepers and contribute to the community. Up in Yonkers, but Great Uncle Joe DeMatteo had connections in City Hall, and was able to help people get into the Scholbohm Houses, the later notorious housing project featured in the HBO series Show Me A Hero.
(I grew up near the water tower in the trailer).
In their 90s, he and my Great Aunt Angie were the last white people there, around the time the events depicted in the show were taking place.
At about the same time, in the early 1980s, the Reagan Administration slashed federal funding for housing more than it cut funding for anything else. It also cut a deal with housing activists, concerned about rising homelessness, to force public housing to give priority to the mentally ill, the otherwise disabled, the addicted, ex-offenders, welfare recipients, and other people the suburbs did not want. Rents started covering far less of the operating costs of public housing.
New York City responded by assigning Section 8 vouchers to public housing recipients. This staved off financial collapse but also reduced the number of city residents receiving housing assistance, since Section 8 was supposed to go to other needy households in addition to those in public housing. This happened quietly, with no public debate, like most things like it.
In addition to growing operating losses, the federal government, which provided the capital funds to build public housing to start with, has not provided any money to reconstruct the buildings now that they are aging and many of the components – windows, roofs, boilers, risers, electric, water pipes, sewer pipes – have to be replaced. Aside from the “stimulus” package in the wake of the Great Recession. State and local governments have a choice of either coming up with their own funds to renovate these buildings, or see them become uninhabitable. I quick search finds that Schlobohm is being renovated.
But other cities have made other choices.
Chicago famously tore down most of its public housing projects, scattering the residents elsewhere in the city. St. Louis did the same. In Baltimore, it appears that the city has given up on “the towers,” perhaps just turning them over the Barksdale gang to run officially, or torn them down too.
In New York City, during the 1980s, the Koch Administration responded to the federal government’s withdrawal from housing policy by launching a huge city-funded housing redevelopment program. But that was at a time when the city had extensive abandoned land and buildings it its possession, as a result of the massive decline of the 1970s, and when the cost of its public employee pension and debt costs were plunging, as high inflation slashed the real value of the debts run up and pensions retroactively enriched in during the administration of former Mayor Lindsay. Adjusted for inflation the cost of NYC debts and pensions fell by half from 1970 to 1980, as the CPI doubled during the decade.
Now, however, the city is facing financial disaster due to the repeat of those pension increases and debts in a low-inflation environment. And the only available land left is that “temporarily” turned over to community garden organizations, which they have claimed as their untaxed, Gramercy Park-like private preserves. And the city’s existing public housing stock is facing accelerated deterioration at a time when soaring debt and pension costs, and other costs for older generations, is sucking up available funds.
The crisis in public housing was easy to foresee. I wrote this 12 years ago.
And could have written it 12 years before that.
The new theme, as money grows scarce, seems to be to blame the blue-collar guys, the NYPD and NYFD for the moment excepted. So Housing Authority maintenance workers have ended up on the “allowed to be blamed” list with the TWU, rather than on the Omerta list with the UFT. Sloth and inefficiency is being blamed for declining conditions in public housing. Not building components coming to the end of their useful life and decades of neglect.
I checked all the years I had readily available on my computer for the Housing and Community Development function in New York City. Full time equivalent employment in that function fell from 18,979 in 1997 to 13,288 in 2017, a decrease of 30.0%. But I’ll bet the number of retired Housing Authority employees, and their costs, is increasing. And I’ll bet the number of managerial positions is the same. A huge decrease in front line employees took place with no public debate, or acknowledgement. And unlike other cities, no one is blowing up public housing, the units are there, are they are still full.
Sort of. Because I have it on good authority that New York City’s public housing, which once housed 600,000 New Yorkers, is down to about 400,000 – even as a growing number of children are homeless. Seniors continue to occupy the family-sized units they moved into when they had families, while paying virtually no rent. Every Mayor from Koch to DeBlasio has proposed to ask, induce, bribe or force such people into smaller units commensurate with their current needs. Apparently nothing has happened. New York City has 200,000 fewer people living in public housing, and 100,000 homeless.
The same priorities are found in public policies for the better off. Only one-third of New York City housing units have three or more bedrooms, compared with two-thirds in the U.S. as a whole. But long time residents are able to hold on to large rent-regulated apartments at below market rents indefinitely, even as young adults moving to the city or moving out on their own must find a place to live in the constrained and expensive market-rate inventory. Crowding into housing with more than one family in a unit, or more than one young adult in a room. And under rent regulation there is no means testing, and the percent of income for housing may be far lower than 25 or 30 percent – or the 50 percent of income many now pay in rent.
The same priorities affect owner-occupied housing. In five or ten years it might make sense for my wife and I to downsize from our family-sized rowhouse to something smaller, and theoretically cheaper, allowing a larger household to occupy all this space. Except that in New York City it might not be cheaper, thanks to the property tax preference for one-to-four family houses and higher property taxes on small apartments. Once retired, we’ll want to cut costs, but New York City might make it more expensive for us to live in one-third the space.
Like all generational equity issues, this one is being discussed in the UK, but it is under Omerta in New York City.
That’s because the underlying political philosophy of New York, regardless of what they tell you, is neo-feudalism.
Under capitalism, you get what you earn, at least in theory. Those who believe that people need an incentive to work and innovate can agree with that. Under socialism, you get what you need, at least in theory. Those who believe that we are all part of one human family can agree with that. But over time, when you have the same group of people in power, both capitalism and socialism degenerate into feudalism, under which the privileged expect to continue to get what they have been getting, and perhaps a little more, whether they need it or not, deserve it or not. For those who have real needs, and who produce real earnings, it’s just tough luck. The feudalism of unearned privilege explains much about the state of the State of New York, where all past deals are set in stone.
The next post in this series will be on infrastructure, when I can get to it.