Socialism: name the data that decides which low-paid care work qualifies for public help

Co-Authored-By: Claude Opus 5.5 <[email protected]>
Claude-Session: https://claude.ai/code/session_01QWPs69B8nQZjtPEUXMKzZx

JoshHeaps.Net/Content/Socialism/essential-work.md

@@ -31,12 +31,48 @@ Minnesota took a third route, and it gives workers a voice. In 2023 it created a
 
 No official, agency or Congress picks industries by name. Work qualifies only if it passes two tests, measured from published government data:
 
-1. **The public already pays for most of it.** Over the last three years, at least half of the industry's revenue came from public benefit programs like Medicaid, Medicare, veterans' care and public child care assistance. Ordinary government purchasing, like cleaning or security contracts, doesn't count. In 2023, Medicaid alone paid for 60% of the spending category that covers most home and community-based care, and for 30% of nursing home care ([MACPAC](https://www.macpac.gov/medicaid-101/spending/)). Whether nursing homes pass depends on Medicare and other public payers too.
+1. **The public already pays for most of it.** Over the last three years, at least half of the industry's revenue came from public benefit programs like Medicaid, Medicare, veterans' care and public child care assistance. Ordinary government purchasing, like cleaning or security contracts, doesn't count. How that's measured, and which kinds of work pass today, is below.
 2. **The job pays less than most.** The typical hourly wage for the job, within that industry, is below the typical wage for all American jobs. In May 2025 that was about $24.50 an hour ($50,980 a year). Home health and personal care aides earned a typical $17.21 an hour, and nursing assistants $20.13 ([BLS, home health and personal care aides](https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm); [BLS, nursing assistants](https://www.bls.gov/ooh/healthcare/nursing-assistants.htm)). The test is by job, not by industry, so the nurses and managers in a nursing home don't pull the aides' number up, and splitting staff into separate companies doesn't change anything.
 
 The first test is the important one, and it's really a test of who pays, not of what's "essential." That's on purpose: it's the one test lobbying can't argue its way around. Where the public is already the main buyer, the public is already setting the price, and a low public rate is a choice about what these workers are paid. It also keeps the program narrow. Retail, restaurants and other low-wage work paid for by private customers don't qualify. They're covered by the parts of the floor that apply to everyone, like the minimum wage and tax credits. Averaging over three years means an industry can't tip itself over the line in a single year.
 
-The national statistics agencies apply the formula every three years and publish the list, using data sources named in the law, with old industry codes mapped to new ones when the codes are revised. Congress can change the formula, but only for everyone at once, with a published cost estimate. It can't add one industry by name.
+The national statistics agencies apply the formula every three years and publish the list, with old industry codes mapped to new ones when the codes are revised. Congress can change the formula, but only for everyone at once, with a published cost estimate. It can't add one industry by name.
+
+### Measuring who pays
+
+The first test needs data on who pays each industry's bills. That data exists for some kinds of care, is misleading for others, and is missing for the rest.
+
+- **The Census Bureau's yearly survey of service businesses** splits health care industries' revenue by who paid it ([Service Annual Survey, Table 4, 2022 release](https://www.census.gov/data/tables/2022/econ/services/sas-naics.html)). But it counts payments from private plans that run Medicare and Medicaid for the government, like Medicare Advantage and Medicaid managed care, as "private health insurance." In 2021, 24 states paid for Medicaid long-term care through those plans ([MACPAC](https://www.macpac.gov/subtopic/managed-long-term-services-and-supports/)), so the survey undercounts public money.
+- **The federal health spending accounts** count those payments as Medicare and Medicaid, where they belong ([CMS methodology](https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/dsm-17.pdf)). But they're organized by type of care, not by industry, and some categories mix several industries.
+- **For social assistance, like child care and non-medical home care, the Census survey doesn't ask who pays at all.**
+
+**What the two health sources show.** The survey column counts only payments made directly by Medicare, Medicaid and other government programs, so it's a floor. The spending accounts column counts managed care too, but its categories are broader.
+
+| Kind of work | Census survey, 2020–22 average | Health spending accounts, 2021 |
+| --- | --- | --- |
+| Home health care | About 63% | About 72% |
+| Nursing homes | About 66% | About 56%, combined with retirement communities |
+| Residential care for developmental disabilities, mental health and addiction | About 67%, but only 45% from Medicare and Medicaid. The rest is other government programs, mostly state ones | Part of a mixed category that's about 61% public |
+| Assisted living and retirement communities | About 16% (2020–21; 2022 withheld). Families pay nearly half | Combined with nursing homes, above |
+| Hospitals | About 34% (2020–21; part of 2022 withheld) | About 52% |
+| Child care | Not measured | Not covered |
+
+Sources: Census [Service Annual Survey, Table 4](https://www.census.gov/data/tables/2022/econ/services/sas-naics.html), 2022 release; [MACPAC, from the national health spending accounts](https://www.macpac.gov/wp-content/uploads/2023/12/EXHIBIT-3.-National-Health-Expenditures-by-Type-and-Payer-2021.pdf), counting Medicare, Medicaid, CHIP and veterans' and military care.
+
+Three things stand out:
+
+- **Home health passes on any measure.** Non-medical home care, where most personal care aides work, isn't measured by industry at all. Medicaid paid about 60% of the broader category that includes most home and community-based care in 2023 ([MACPAC](https://www.macpac.gov/medicaid-101/spending/)), so it very likely passes, but real data has to show it.
+- **Counting managed care properly puts hospitals near the line.** Because the wage test is by job, a hospital that qualifies brings in its low-paid aides, housekeepers and cooks. That's consistent with the rule, since the public does pay for most hospital care, but it would add a great deal to the cost. It's shown here so nobody is surprised by it later.
+- **Child care is the hard case.** The US Treasury estimated that federal and state spending equaled about 47% of child care businesses' revenue in 2019, and said that probably overstates the public share, since some of that money pays for care outside those businesses ([US Treasury, 2021](https://home.treasury.gov/system/files/136/The-Economics-of-Childcare-Supply-09-14-final.pdf)). Pandemic relief money pushed the share up for a few years. Until there's real data, child care's status is undetermined.
+
+**So the law fixes the method in advance:**
+
+- **Which money counts.** A closed list: Medicare and Medicaid, including their private plans; CHIP; veterans' and military health care; the Indian Health Service; state programs for people with disabilities; child care assistance and Head Start. Only money paid to businesses in the industry counts. Workers' compensation, tax credits, Social Security benefits paid on a resident's behalf (which are the resident's own income), ordinary government contracts, and temporary emergency money don't. Changing the list follows the same rule as changing the formula: for everyone at once.
+- **Measured from payment records.** Public money comes from the programs' own payment records, matched to businesses by tax ID, not from what businesses say in a survey. Revenue comes from the Census survey, counting revenue from care, not donations or investment income. Where the Census withholds a figure, the last published one is used, and flagged.
+- **New data, on a deadline.** The Census survey has three years to report Medicare and Medicaid plan payments separately from private insurance, and to ask child care and home care businesses who pays them. The cost comes out of the supplement's own budget.
+- **Status is sticky.** An industry joins the list only after two reviews in a row at 50% or more, and leaves only after two reviews in a row below 45%. So sampling noise near the line, or one year's emergency money, can't flip it. A newly qualifying industry is paid only after its cost estimate has been public for a full budget year.
+- **No losing status for missing data.** If a list isn't published on time, the last one stays in force. When industry codes are revised, an industry keeps its status for two reviews while the new codes are mapped, and the mapping is published for comment first.
+- **No moving into a qualifying industry.** A company that works mainly for a related business takes that business's industry, and industry codes are checked against state licensing. An assisted living operator can't qualify by moving its aides into an affiliated home health agency.
 
 ### Paid to workers, by the hour
 
@@ -73,6 +109,6 @@ The founding plan pairs this subsidy with public research on automating the same
 - **Some essential work won't qualify.** Where families, not the public, pay most of the cost, the formula leaves the work out. That may include a lot of child care, where D.C.'s evidence comes from. Families who pay for care themselves, and people who care for relatives unpaid, get nothing from this. That's the price of a rule that can't be bent. States can still do what D.C. did.
 - **The formula will be fought over.** Industries will argue about how their work is classified and what counts as public revenue. Checking workers against public program records, not just the codes employers pick, is the defense. It isn't perfect.
 - **Capture isn't ruled out.** The rules catch pay cuts, including cuts in benefits, and states cutting their rates. They can't catch every raise that would have happened anyway.
-- **It costs real money.** Tens of billions of dollars a year is plausible once home care and nursing homes qualify. That's a choice about what care workers are paid, and the page states it so voters can make it.
-- **It's federal money for work states largely pay for.** States already can, and some do, raise care workers' pay themselves. The federal role here is to make that pay not depend on where you live, and to stop states using it as a reason to pay less.
+- **It costs real money.** Tens of billions of dollars a year is plausible once home care and nursing homes qualify, and much more if hospitals do. That's a choice about what care workers are paid, and the page states it so voters can make it.
+- **It's federal money for work states largely pay for.** States already can, and some do, raise care workers' pay themselves. The federal role here is to make that pay not depend on where you live, and to stop states using it as a reason to pay less. That sits uneasily with leaving child care out: its workers are overwhelmingly women, and if it doesn't qualify, their pay still depends on their state.
 - **Congress can still change the formula.** It's harder to bend than a list, not impossible.

JoshHeaps.Net/Content/Socialism/open-problems.md

@@ -23,7 +23,7 @@ An honest list of what the model hasn't solved yet, most dangerous first.
 
 7. **Growth and dilution.** *(Partly answered.)* Softened by the tenure ramp, not eliminated, and federal tax law softens it less than the founding plan expected: by default, the part of a share new members haven't reached goes to the reserve, not to other members ([How a Locked Co-op Is Taxed](taxes.md#the-tenure-ramp)). In steady state, an equal split per head still means a marginal hire must generate the average surplus to break even for incumbents. Capital-intensive expansion into lower-margin lines will face internal resistance conventional firms don't have. [When Growing Means Sharing](growth.md) makes Mondragon's answer the standard path: a lower-margin line becomes its own locked co-op, funded from the parent's reserve as a finite, voteless investment, under rules that stop it being used to push existing workers out or move money through insider deals. Still open: growth that can't be split off still dilutes, spin-offs create richer and poorer co-ops (the groups can pool profits, but don't have to), and the evidence comes from co-ops that could hire non-members, so it probably understates the problem under the lock.
 
-8. **Who decides which sectors are "essential"?** *(Partly answered.)* Subsidy authority is price-setting power over a large chunk of the labor market, and every low-margin industry will suddenly discover it is Essential. [Who Decides What's Essential](essential-work.md) takes the choice away from people. A fixed formula decides: work qualifies only if public programs already pay for most of it and it pays badly. The money goes to workers by the hour, measured from records like Medicaid's visit logs, and states whose rates fall behind inflation lose federal Medicaid money in step. Still open: work mostly paid for by families, possibly including much child care, doesn't qualify; employers and owners may still capture some of the money; and it plausibly costs tens of billions of dollars a year.
+8. **Who decides which sectors are "essential"?** *(Partly answered.)* Subsidy authority is price-setting power over a large chunk of the labor market, and every low-margin industry will suddenly discover it is Essential. [Who Decides What's Essential](essential-work.md) takes the choice away from people. A fixed formula decides: work qualifies only if public programs already pay for most of it and it pays badly. The money goes to workers by the hour, measured from records like Medicaid's visit logs, and states whose rates fall behind inflation lose federal Medicaid money in step. The data sources are now named: federal payment records for public money, and Census revenue, with new Census questions on a deadline and rules so status can't flip on noise. Still open: counted properly, hospitals are near the line, which would add their low-paid jobs and a great deal of cost; child care's status is undetermined until the new data exists; other work mostly paid for by families doesn't qualify; employers and owners may still capture some of the money; and it plausibly costs tens of billions of dollars a year.
 
 9. **The 1/N problem.** *(Mostly answered.)* Peer monitoring works at 30 people; at 10,000 your extra effort raises the pool by a rounding error. The answer is culture and structure: co-ops really do push out free riders, and the federation model keeps units small enough for monitoring to bite while pooling risk above them. [Does Sharing the Profit Mean Less Effort?](free-riding.md) turns that into rules: small teams with their own numbers, team bonuses whose formula members set in advance, and a fair, fast dismissal process with protections against retaliation and discrimination. Still open: the evidence comes from conventional firms with profit sharing, not co-ops, and a small shared stake may even make people less willing to speak up; the pilot tracks value added per hour as co-ops grow to find out.