Current Employment Survey Data for 2020: New York City Reduced our Public Services, but Annual Average Local Government Employment Barely Fell – while the Home Health Care Boom Stalled

As noted in my prior post, the release of rebenchmarked annual average Current Employment Survey data from the Bureau of Labor Statistics shows that NYC lost the staggering total of 517,500 private wage and salary jobs from 2019 to 2020, by far the most since at least 1950 and probably the most ever.   On a percentage basis only Hawaii fared worse among U.S. areas of significant size.

More recent data is even worse.  The monthly e-mail from the New York State Department of Labor shows a decrease of 626,800 private sector wage and salary jobs (15.3%) in NYC from February 2020, before the shutdowns, to February 2021.

The annual average data shows that while the sectors that were shut down suffered the steepest job losses, there were significant decreases across all sectors – even health care.  And yet annual average New York City local government employment was just 1,400 (0.3%) lower in 2020 than it had been in 2019.  For state and local government combined the decrease was just 1,600 (0.3%).

Measured from February 2020 to February 2021, the NYC local government employment is down just 4,200 (0.8%), with a decrease of just 600 (0.4%) for elementary and secondary schools – despite falling enrollment.  And Mayor DeBlasio has cut deals with the unions to guarantee no layoffs until half a year into the next Mayor’s term, regardless of circumstances or consequences.

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Most of the data that will be used in this post may be found in this spreadsheet.

The absence of significant decreases in NYC local government employment last year came as a surprise to me, not only because of the service cuts but also because of the massive overtime being handed out (or in the case of corrections officers, forced on them) due to alleged staffing shortages. Since the average city worker is only on the job for 25 years, retirements alone should reduce the size of the workforce by 20,000 in one year if no one is hired.  Those who leave for other reasons – to move to a different area, perhaps because a spouse’s job is relocating, or to change careers – are on top of that.  So the data implies that New York City has been hiring workers while increasing overtime and reducing services.  

Moreover, last summer I did observe significant decreases in NYC local government employment compared with a year earlier.  To find out if that was a mirage, I downloaded data on the change in NYC local government employment, compared with a year earlier, by month.

Here, apparently, is the explanation.  The New York City ramped up local government hiring, compared with a year earlier, in late 2019, and that boom carried into early 2020. In January, February and March of 2020, NYC local government employment was 15,500 (3.2%), 9,100 (1.9%) and 9,300 (1.9%) higher than it had been a year earlier.  Year-over-year decreases followed for the rest of 2020, but the annual average for that year still ended up barely lower than in 2019.  In February 2021, moreover, NYC local government employment was 4,200 (0.8%) lower than it had been in 2020, but it was still 4,900 (1.0%) higher than it had been in February 2019.

Meanwhile private wage and salary employment in the Social Assistance sector, a primarily non-profit sector that is also substantially supported primarily by tax dollars, was down 21,300 (9.6%) from February 2020 to February 2021.  This included decreases of 8,300 (22.0%) in Child Day Care Services, 1,000 (13.3%) in Vocational Rehabilitation Services, and 12,900 (7.9%) in Individual and Family social Services.  So that is what has been cut to try to balance the city budget, although in the case of child care, lower demand due to more adults at home may be the explanation.  The Community Food, Housing, Emergency and Other Relief Services industry added 1,000 jobs (7.9%) year-over-year.

Annual average state government, local government, and post office employment for NYC and other area of NY State will be discussed in more detail later on.  But first, let’s examine the trends in Home Health Care employment, which is also primarily funded by the government (Medicaid, Medicare).

Over the years I had become first aware, and then concerned, and then alarmed as Home Health Care employment exploded in New York City, and accounted for a greater and greater share of the city’s private sector employment gains.  To the point where two years ago, I made Home Health Care the focus of this annual post.

The pace of gain – and the increase in the pace of gain – were so huge that projecting it forward, in a few decades every person on planet earth would have been a NYC home health aid.  Employment grew to a level that called the actual existence of both the (mostly senior) beneficiaries and workers into question.  

In late 2019, as part of a tabulation of employment data from the Census of Governments, I examined the issue in more detail by comparing employment in several industries that provide services to seniors with the population age 75 or over, across different places and years.   Since Home Health Care industry employment (part of the Health Care sector) in part substitutes for employment in the Services to the Elderly and Disabled industry (part of the Social Assistance sector) and Nursing and Residential Care industry.  That analysis was at the end of this post.

Even looking at the three industries as a whole, and normalizing it for the size of the 75+ population, I found that NYC employment, and in particular Brooklyn employment, in these “Senior-Related” categories to be sky-high. Compared with other areas of the state and the Northeast…

Compared with other areas around the country…

And compared with the past.

I tried my best to call attention to this trend so that someone would look into it and find out what was going on, but it has never hit the press.  But an internet search did turn up this press release from December 2020.

https://www.justice.gov/usao-sdny/pr/10-defendants-arrested-home-health-aide-fraud-scheme

Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging(several people) with conspiracy to commit mail, wire and healthcare fraud; substantive counts of mail fraud, wire fraud, and healthcare fraud; and conspiracy to violate the Anti-Kickback Statute, in connection with a  scheme to fraudulently bill Medicaid for home-health and personal-care services that were not actually rendered….

“Money that’s earmarked for Medicaid-approved services, and fraudulently paid out to those who don’t render these services, is a crime that’s ultimately paid for by taxpayers themselves. In this case, as we allege, there were even patients involved in the kickback scheme who were willing to play along with the no-show scam in order to earn a few extra bucks. With a nearly $5 billion increase in managed long-term care plan spending recorded over a recent six-year period, the money paid out to those charged today is no drop in the bucket.”

At all times relevant to this Indictment, eligible Medicaid beneficiaries in New York were able to seek government-funded home-health and personal-care services through managed long-term care plans (“MLTCs”).  In turn, MLTCs received Medicaid funding to pay for their beneficiaries’ home-health and personal-care services.  In recent years, home-health costs in New York have ballooned.  In or about January 2020, New York’s State budget director announced, in substance and in part, that spending on MLTCs tripled between the 2013 and 2019 fiscal years, representing a $4.8 billion increase.

Home care is a health service provided in the patient’s home to promote, maintain, or restore health or lessen the effects of illness and disability.  Home care includes personal-care services, administered by Aides, including housekeeping, meal preparation, bathing, toileting, and grooming.

This is a middle case of three possible types of home care fraud. 

The base case is providing services to seniors who don’t actually need them.  With increasing age and growing infirmity, it first becomes taxing, and then difficult, and then very difficult, and finally impossible to take care of oneself.  As noted in one of my series of posts on equity and eligibility back in 2008, it is difficult for someone other than the senior themselves to evaluate how great the need, and this opens up the possibility of services being provided to the most entitled rather than the neediest.

Special Needs – Public Help for the Disabled

While few would choose to be placed in a nursing home if they didn’t need to be there, many more would perhaps enjoying living like a rich person with a servant doing housekeeping, cooking and shopping.  Social services organizations seeking to increase their revenues – the money they get to keep that doesn’t go to the home health aides themselves — might seek to market them to seniors who would not otherwise feel the need to seek them.  You deserve this.  Everyone is doing it.  It’s free.  This ripoff is workers and their organizations getting scarce taxpayer dollars to provide services to seniors that those seniors don’t really need – redirecting those dollars from other public services and benefits.

The indictment is for workers and their organizations getting paid to notprovide services to seniors that they don’t need, with kickbacks to some of those seniors to induce them to go along.

The most advanced scheme, however, the scheme that would make the most money, would involve billing for workers who don’t actually exist to not provide services to seniors who don’t actually exist either.  I suspect some of that was going on too.

Perhaps because the federal government, at least, is paying attention to what is going on, the trend of soaring NYC Home Health Care employment suddenly halted last year.  In fact, NYC Home Health Care employment actually fell slightly on an annual average basis, and it was down 4,800 jobs (2.2%) from February 2020 to February 2021.  It would be nice to think that this represents a reduction in fraud in the Medicaid program, but given that this is New York, it is just as likely that legitimate services are being cut instead.

As I’ve noted, there are legitimate reasons for Home Health Care employment to be increasing, given our aging population, but New York City got completely out of line, especially starting in 2013. The Rest of New York State, which had not gotten out of line, did not have a decrease in Home Health Care employment last year.

The U.S. as a whole also had a dip in Home Health Care employment from 2019 to 2020.  The U.S. decrease was 1.7%.  The NYC decrease was 0.6%.  Perhaps fear of catching COVID-19, rather than a decrease in fraud, is responsible for halting the growth of Home Health Care employment in U.S. — and NYC as well.  That and the earlier than expected deaths of seniors who would otherwise be receiving services.  NYC Nursing and Residential Care industry employment also fell from 2019 to 2020.

But seniors don’t have to worry about catching the disease from home health care aides who don’t actually show up.  Noted the indictment.

For example, on or about September 9, 2017…was at a vineyard and winery in New Jersey at a time she claimed to be performing personal-care services for a patient residing in Brooklyn, New York; in or about January 2019…was on a Caribbean cruise at a time she claimed to be performing personal-care services for a patient residing in Brooklyn, New York; and, on or about March 1, 2019…was at a Brooklyn restaurant at a time IJAZ claimed to be performing personal-care services.  These no-show arrangements caused the Agencies to submit false Medicaid claims to MLTCs. 

With no-show cases at the Agencies, an Aide’s fraudulently-obtained wages were often split between the no-show Aide and the no-show patient.  In addition to paying kickbacks to no-show patients, no-show Aides sometimes paid kickbacks to conspirators who referred no-show cases to Aides at the Agencies.   

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All this gives me a very different, more cynical view of Governor Andrew Cuomo’s nursing home scandal, and the obsession of New York State legislators with it.  Plenty of tragic mistakes were made in the early days of COVID-19.  Just to take one that no one is talking about, Cuomo borrowed $500 million dollars that state residents will have to pay back in the future, in higher taxes or public services lost, to outbid other states for ventilators.  But a few months into the crisis, hospital workers figured out that since COVID-19 didn’t affect the body the same way other respiratory diseases did, instead of saving patients by putting them on ventilators they were actually killing them.  Wasted money, excess deaths, no one cares.

In the case of nursing homes, the State of New York reported a huge toll from COVID-19 in mid-April 2020, at the peak of the epidemic, when hospital beds were full, temporary outdoor hospitals were being set up, and patients were being turned away.

https://www.ny1.com/nyc/all-boroughs/news/2020/04/18/coronavirus-in-nursing-homes-data-released-on-deaths-in-new-york

“I’d like to see a breakdown of the total number of people that might have passed away that might not have been attributed to COVID-19,” Queens Assemblyman Ron Kim said. “I think we need more details.”

Kim worries the numbers might be generally underreported at nursing homes.

Officials say the numbers very well might be larger and will grow. At this point, the state depends on the nursing homes self reporting.

The average patient admitted to a nursing home lives for two years. 

As noted in the link above by June, during the Democratic Convention, some were objecting to not counting patients who died after being placed in the hospital as nursing home deaths.   Cuomo was also blamed for a March 2020 directive requiring nursing homes to accept COVID-19 patients who were stable, to preserve hospital capacity for others.  

There is an urgent need to expand hospital capacity in New York State to be able to meet the demand for patients with COVID-19 requiring acute care. As a result, this directive is being issued to clarify expectations for nursing homes (NHs) receiving residents returning from hospitalization and for NHs accepting new admissions.

No resident shall be denied re-admission or admission to the NH solely based on a confirmed or suspected diagnosis of COVID-19. NHs are prohibited from requiring a hospitalized resident who is determined medically stable to be tested for COVID-19 prior to admission or readmission.

Was this a mistake?  Maybe.  But it was mistake made in the middle of an crisis, and we don’t know how many people would have been prevented from receiving hospital care if the beds were kept full of nursing home patients who were recovering but the nursing homes would not take back. Nor do we know if the spread of COVID-19 to previously uninfected nursing home residents was from these returnees, or from the staff or visitors as the NY State Health Department claims.

https://www.health.ny.gov/press/releases/2020/2020-07-06_covid19_nursing_home_report.htm

Regardless, when I hear members of the New York State legislature going off on Cuomo and nursing homes, I think they are actually saying something else. 

Don’t you dare question the growth of our political supporters’ home health care jobs (or at least funding), or we’ll accuse you of killing our dear seniors by forcing them into death traps such as nursing homes!

Remember,of the dozens of state legislators that former federal prosecutor Preet Bharara and his predecessors got convicted of corruption, Medicaid fraud by social service agencies they and their supporters controlled was the number one crime.

https://buffalonews.com/news/local/bharara-sees-corruption-all-over-new-york-state/article_641733b2-b73e-5fb2-aa61-c67c1890b29a.html

“If I could put 50 prosecutors on public corruption, chances are they would not be lacking for work,” Bharara said.   That’s partly because of Cuomo’s decision to disband the Moreland Commission. Nine months after appointing the state panel to fight corruption, Cuomo shut it down last spring in a budget deal with legislators that included new ethics reforms. “I don’t believe we needed another bureaucracy for enforcement. We needed laws changed, and that’s what Moreland (Commission) was about,” Cuomo said at the time.  Soon after the shutdown, though, Bharara’s office seized a truckload of documents that the commission had gathered.

Why is it always federalprosecutors who investigate political corruption in New York, and not the State Attorney General?   Why was this explosion of Home Health Care employment and costs identified by some nerd beavering away on an I-mac in his spare time in his mother’s basementwife’s attic, rather than the office of the City or State Comptroller?

Perhaps this explains why most New York State politicians are demanding that Governor Cuomo resign, while most New Yorkers would prefer that he finish his term – and then go away.

https://www.cnn.com/2021/03/21/politics/andrew-cuomo-analysis/index.html

Most New Yorkers don’t want Cuomo to step down. Even in a Quinnipiac University poll out this week, which was among Cuomo’s worst, more New Yorkers want him to stay in office (49%) than resign (43%). No other poll has had numbers that bad. Fewer voters (36%) believe he should be impeached and removed from office.

Now, it’s not as if Cuomo is popular. His approval rating in the Quinnipiac poll was just 39%. His favorable rating was lower at 33%. A Siena College poll released a little over a week ago pegged his favorable rating at a middling 43%.

Nope, it is a judgment on the rest of NY state’s politicians – who are believed to be even worse.  I feel the same way.  I once told a neighbor, who works for Cuomo, that I despise him slightly less than the rest of them.   “Well I guess that’s a kind of endorsement,” she replied.  

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Let’s return to state and local government employment, and to “President”“Governor?” Bill DeBlasio, the man who is seeking to use Cuomo’s crisis to become slightly less despised than he is.

I started charting this data after former Governor Pataki created an “everyone onto the payroll and into the pension system” welfare program for the Rest of New York State, at New York City’s expense, mostly via differences in aid revenues.   The local government boom in the rest of the state was halted by the Cuomo Administration after 2010, but employment started rising again in 2014. Then there was a plunge from 2019 to 2020 in Upstate New York and the Downstate Suburbs – but not in New York City.  Compared with their 1990 levels, in fact, Upstate New York was lower in 2020 than New York City.

It was mostly the already-well-funded schools that in the Rest of New York State that were used as a high-end welfare/jobs program there, by shifting state aid revenues away from New York City (via the STAR program, which provides more state aid to districts that spend more).  

When NYC started getting its fair share of state school aid in the early 2000s, school districts in the rest of the state started jacking up property taxes to keep putting people on the payroll – even as the relatively large Millennial generation exited school and school enrollment fell.  

Governor Cuomo’s property tax cap halted the trend.  After a drop in the Rest of New York State from 2019 to 2020, its Elementary and Secondary School local government employment is lower, compared with 1990 (pre-Pataki), than New York City.

Let’s chart some different eras in state and local government employment in New York State, by labor market area.

The data for 1994 to 2013 reflects Governor Pataki’s goal of moving state government jobs away from Downstate New York and the Capital District to declining areas of Upstate New York.  Metro Elmira did not share in the benefits.  As I noted a couple of years ago, no area of the state has suffered a worse economic decline than the Southern Tier in general, and Chemung County in particular.

Apparently someone noticed and shifted some state government jobs to metro Elmira from 2013 to 2019.  Those jobs, however, may have been lost to metro Binghamton next door. Similarly, state jobs were reduced again in NYC, but increased out on Long Island.

Metro Elmira benefitted from a further increase in state government employment from 2019 to 2020, even as state employment was flat to falling elsewhere in NY State.

Overall, however, there are more than four local government jobs for every state government jobs, with an even greater ratio Downstate since most state jobs are located Upstate.  Local government by New York State labor market area is charted next.

The Pataki local government job boom was much bigger than the Pataki state jobs relocation.  As the 1994 to 2013 data shows, local government employment soared by 5.0% or more just about everywhere in the state during those years.  The exceptions were New York City, metro Binghamton and Elmira on the Southern Tier, metro Buffalo-Niagara Falls, and metro Syracuse.  The biggest gains were in the Downstate Suburbs, since Pataki’s STAR program shifted state school aid to the high spending school districts there.

From 2013 to 2019, Mayor DeBlasio increased local government employment in New York City, and there were gains in Orange-Rockland-Westchester counties and the Capital District as well.  In metro Elmira, an increase in local government employment coupled with a shrinking tax based caused a serve fiscal crisis.  From the year 2018…

https://chemungcountymatters.com/2018/03/16/chemung-county-responds-to-elmiras-fiscal-crisis-by-promoting-further-division/

But local government employment fell elsewhere in New York State, as a combination of rising compensation for government workers compared with private sector workers and Governor Cuomo’s tax increase cap meant fewer public jobs could be afforded.

Which brings us to the change from 2019 to 2020, the year of COVID-19. Local government employment was decreased by at least 4.5% in every area of New York State except New York City. Most areas had decreases of at least 6.0%, and many areas Upstate had decreases of more than 8.0%.  This despite the fact that the Downstate suburbs and Upstate New York had much smaller percentage private sector job losses than New York City did.

With the latest fiscal stimulus package, the DeBlasio Administration will probably increase spending in 2021 – in categories where it is already high, and where there is no long-term benefit.  For NYC’s now overfunded public schools, that is required.  

Meanwhile, past experience shows that city fiscal crises begin several years after economic downturns, as the City of New York advances revenues, defers costs, and covers up problems as long as possible.  After the economic collapse of 1991, for example, the City of New York had to cut jobs and raise taxes in 1993, and was nearly broke in 1994.  One can only expect a repeat, which is one reason why there is such a fierce push to grab as much public money as possible and lock it in with irrevocable contracts before reductions need to occur.  One would expect money for the poor, and especially poor children, and the maintenance of the infrastructure to be first in line for the chopping block yet again.

 Finally, it is worth noting that the U.S. Post Office was expected to do essentially the same job in 2020 as it was 30 years ago in 1990 with 53.9% fewer employees.  The decrease was from 38,000 NYC postal workers to just 17,500, though some of this might be accounted for by jobs shifted across the river to New Jersey rather than eliminated.  In the Rest of New York State, Post Office employment fell by 33.5% over 30 years, from 37,600 to 25,000.  The U.S. decrease was 27.0% — combined with substantial population growth. 

Clearly, the financial problems of the U.S. Post Office are not due to a lack of productivity gains.