diff --git a/JoshHeaps.Net/Content/Socialism/essential-work.md b/JoshHeaps.Net/Content/Socialism/essential-work.md index 05f4016..d7a4961 100644 --- a/JoshHeaps.Net/Content/Socialism/essential-work.md +++ b/JoshHeaps.Net/Content/Socialism/essential-work.md @@ -32,7 +32,7 @@ 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. 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. +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 $20.32 ([BLS, home health and personal care aides](https://www.bls.gov/oes/2025/may/oes311120.htm); [BLS, nursing assistants](https://www.bls.gov/oes/2025/may/oes311131.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. @@ -76,25 +76,28 @@ Three things stand out: ### Paid to workers, by the hour -- **Straight to the worker,** as a fixed amount per hour worked, as D.C. did at first. It's taxed like wages but doesn't count as income for the worker's own benefits, like Medicaid or food assistance, so it can't knock anyone off them. -- **Real hours only.** Federal payroll forms report pay, not hours. So hours come from records that already exist for public programs, like the electronic visit records federal law has required for Medicaid home care since 2020 ([Medicaid.gov](https://www.medicaid.gov/medicaid/home-community-based-services/guidance/electronic-visit-verification-evv)), and from employers' own payroll hours where those aren't available. Hours per worker are capped, samples are audited, and when padded hours are found, the employer repays. -- **Everyone doing the work counts,** including home care workers employed directly by the people they care for through a state program, and self-employed providers paid by a public program. -- **It fades out gradually** as a worker's own hourly pay rises above the threshold, instead of stopping all at once. That means someone just above the line keeps less of each raise for a while, a real cost stated openly. +- **Straight to the worker,** as a fixed amount per hour worked, as D.C. did at first. +- **Real hours only.** Federal payroll forms report pay, not hours. So hours come from records that already exist for public programs, like the electronic visit records federal law has required for Medicaid home care since 2020 ([Medicaid.gov](https://www.medicaid.gov/medicaid/home-community-based-services/guidance/electronic-visit-verification-evv)), and from employers' own payroll hours where those aren't available. Hours are capped at 2,600 a year per worker, about 50 a week, across all their jobs. Live-in workers are paid for the hours their state program or wage law already counts as work. Samples are audited, and when padded hours are found, the employer repays. +- **Everyone doing the work counts,** including home care workers employed directly by the people they care for through a state program, and self-employed providers paid by a public program. Their hours come from the program's own records. +- **How much.** A first draft: $3 an hour, set in law. That's enough to take a typical home care aide from $17.21 to about $20.20, roughly what a typical nursing assistant earns now, and an aide in the bottom tenth from $13.00 to $16.00 ([BLS](https://www.bls.gov/oes/2025/may/oes311120.htm)), if employers don't claw any of it back (see [below](#stopping-the-money-from-leaking)). It's a budget choice, not a living wage. It rises each year with average wages, not prices, so it doesn't shrink against the pay it tops up. Every three-year review publishes vacancies, turnover and pay in qualifying work next to the amount, so Congress can see whether it's doing anything. +- **The same amount for everyone in a qualifying job.** An earlier draft faded it out as a worker's own pay rose. That would have taken a cut of every raise, including raises a state or wage board ordered, and pay in these jobs is bunched too tightly for it to save much: nine in ten home care aides earn under $21.65, and nine in ten nursing assistants under $25 ([BLS](https://www.bls.gov/oes/2025/may/oes311131.htm)). It would also have needed an hourly rate for every worker, which doesn't exist for live-in, day-rate or self-employed providers. So the only way off is the job-level test above: when typical pay in the job rises past the national median, the job leaves the list. +- **How it's taxed.** It's paid like wages: income tax, payroll tax and Social Security credit, and it counts as earned income for the Earned Income Tax Credit, as any other pay does. A parent in the part of that credit that shrinks with income keeps roughly 60 cents of each dollar after all of it. But the law excludes the supplement from income when deciding eligibility for Medicaid, CHIP, marketplace health subsidies, food assistance, SSI and housing help, so it can't knock anyone off them. That takes a line in each program's rules, and it costs money that hasn't been estimated. +- **Who can get it.** Anyone allowed to work in the US at the time, with their own Social Security number. Authorization is checked each quarter against Social Security and immigration records. A mismatch, like a name change, gets 90 days to fix before any payment is held, and hours worked while authorized are always paid. That needs saying in the law itself. Federal law bars immigrants who aren't "qualified aliens" from "any grant" or "similar benefit" paid with federal money ([8 U.S.C. 1611](https://www.law.cornell.edu/uscode/text/8/1611)), and that leaves out many people who are allowed to work, like those with Temporary Protected Status or DACA. So the supplement's law says it applies to anyone authorized to work, notwithstanding that rule, and that states can't exclude them either. That's a choice Congress could split off from the rest. The law also says the supplement isn't a public benefit for immigration purposes, so families don't avoid it out of fear. - **Same for everyone.** Co-ops and conventional firms qualify on exactly the same terms. The subsidy doesn't favor co-ops, and it doesn't skew [the pilot's](pilot-spec.md) comparison with conventional firms, because both sides get it. ### Stopping the money from leaking Money aimed at workers has three ways out. Each gets its own rule. -- **The public payer.** The biggest risk is that states cut their Medicaid rates, knowing the federal supplement will fill the gap. So a state's rates for qualifying care can't fall behind inflation. If they do, the federal share of the state's Medicaid spending on that care drops by the same amount. The supplement also can't count toward any rule requiring a share of rates to go to wages, and it's left out when rates are set. -- **The employer.** An employer can't let any job's total pay, wages plus benefits, fall behind inflation compared with the year before its workers qualified. One that does repays the difference to its workers, with a penalty. Pay in qualifying work is compared every year with similar work that doesn't qualify, so slower raises show up. +- **The public payer.** The biggest risk is that states cut their Medicaid rates, knowing the federal supplement will fill the gap. So a state's rates for qualifying care can't fall behind inflation. If they do, the federal share of the state's Medicaid spending on that care drops by the same amount. The supplement also can't count toward any rule requiring a share of rates to go to wages, like [Medicaid's 80% rule for home care](high-turnover.md#when-medicaid-decides-how-much-goes-to-pay), and it's left out when rates are set. +- **The employer.** An employer can't let any job's total pay, wages plus benefits, fall behind inflation compared with the year before its workers qualified. One that does repays the difference to its workers, with a penalty. Pay in qualifying work is compared every year with similar work that doesn't qualify, so slower raises show up. And the supplement can't be counted toward any minimum wage, and a state or wage board can't set its minimums lower because of it. - **The owner.** In industries full of related-party rent and management fees, public money that frees up payroll can still end up with owners. The supplement doesn't fix that. It's a reason for the rate rules states set, and for co-ops. ### The budget -The supplement is a fixed amount per hour, set in law and adjusted for inflation, so it doesn't shrink when Congress wants to starve it quietly. The cost is whatever that amount times the qualifying hours comes to, published every year. When the formula adds an industry, the cost rises, and everyone can see by how much. +The supplement is a fixed amount per hour, set in law and rising with average wages, so it doesn't shrink when Congress wants to starve it quietly. The cost is whatever that amount times the qualifying hours comes to, published every year. When the formula adds an industry, the cost rises, and everyone can see by how much. -For scale: $2 an hour for 5 million workers averaging 1,500 hours a year costs $15 billion a year. There are about 4.7 million home health and personal care aides alone ([BLS](https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm)), though not all of them would qualify. +For scale, in May 2025 employers reported about 4.4 million home care aide and nursing assistant jobs in industries likely to qualify: about 2.3 million in non-medical home care and similar services, 1.1 million in home health, 590,000 in nursing homes and 330,000 in residential care for people with disabilities or mental illness ([BLS, aides](https://www.bls.gov/oes/2025/may/oes311120.htm); [BLS, nursing assistants](https://www.bls.gov/oes/2025/may/oes311131.htm)). Those are jobs, not people, since some people hold two. At $3 an hour and 1,200 to 1,500 hours a year each, that's about $16 billion to $20 billion a year. Not included: aides hired directly by the people they care for, who don't all show up in these counts; self-employed providers; about 510,000 hospital aides and nursing assistants, plus hospital housekeepers and cooks, if hospitals qualify; and the cost of leaving the supplement out of benefit tests. About 430,000 more jobs are in assisted living, which doesn't qualify on today's numbers. Each dollar an hour on the amount adds about a third. ### Worker voice, too @@ -109,6 +112,7 @@ 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 leaves out workers who aren't allowed to work here.** That's a political choice, not something the law forces: paying people for work they can't legally be hired for would be hard to pass, and this page doesn't pretend otherwise. It's worse than leaving them out. By the logic of the tax-credit research above, a supplement that draws more authorized workers into care work can hold down the wage employers pay, and workers who don't get the supplement bear that with nothing to make up for it. Many care workers are immigrants, and undocumented ones are more likely to work off the books, where no program reaches them ([PHI](https://www.phinational.org/policy-research/key-facts-faq/)). What protects them is the rule against employers cutting a job's pay, and minimum pay set by state wage boards like Minnesota's, which covers every worker in the job whatever their status. - **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. diff --git a/JoshHeaps.Net/Content/Socialism/open-problems.md b/JoshHeaps.Net/Content/Socialism/open-problems.md index 098ea5b..845fddf 100644 --- a/JoshHeaps.Net/Content/Socialism/open-problems.md +++ b/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. Members who share profit also have a reason to hire people like themselves. The pilot tests co-ops' hiring as a group with fake paired applications ([Testing hiring directly](growth.md#5-measuring-it)). But that can only catch co-ops being much worse than ordinary employers, conventional firms aren't tested alongside them, and hiring through members' friends and family is only counted, not tested. And the measure of whether co-ops grow more slowly than similar firms is too noisy, at pilot scale, to find anything but a very large gap ([Measuring it](growth.md#5-measuring-it)). -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. +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; workers without work authorization get nothing and may be made worse off; and at a first-draft $3 an hour it costs about $16 billion to $20 billion a year for home care aides and nursing assistants alone, more if hospitals qualify ([Paid to workers, by the hour](essential-work.md#paid-to-workers-by-the-hour)). 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.