2021-4-12 The American Jobs Plan: The Caregiving Infrastructure

$400 Billion for the Long-term Caregiving Infrastructure

The American Jobs Plan, aka the Biden Infrastructure bill (note: as yet, not passed by Congress, so the final form will almost certainly change as it acquires more concrete detail), has been criticized for treating workers as infrastructure. Roads and bridges and dams and broadband, yes; human workers, no, opponents have stated.

But workers are indeed a vital infrastructure component of the economy and the widely-accepted economic term “human capital” underscores this. The American Jobs Plan’s summary on caregiving infrastructure support aims to:

  • Solidify the infrastructure of our care economy by creating jobs and raising wages and benefits for essential home care workers. These workers – the majority of whom are women of color – have been underpaid and undervalued for too long. The President’s plan makes substantial investments in the infrastructure of our care economy, starting by creating new and better jobs for caregiving workers. His plan will provide home and community-based care for individuals who otherwise would need to wait as many as five years to get the services they badly need.
  • Expand access to long-term care services under Medicaid. President Biden believes more people should have the opportunity to receive care at home, in a supportive community, or from a loved one. President Biden’s plan will expand access to home and community-based services (HCBS) and extend the longstanding Money Follows the Person program that supports innovations in the delivery of long-term care.
  • Put in place an infrastructure to create good middle-class jobs with a free and fair choice to join a union. The HCBS expansion under Medicaid can support well-paying caregiving jobs that include benefits and the ability to collectively bargain, building state infrastructure to improve the quality of services and to support workers. This will improve wages and quality of life for essential home health workers and yield significant economic benefits for low-income communities and communities of color.

[Note: This program addresses one of the U.S.’s grave shortcomings, i.e. caring for our elderly and disabled persons. It is expected that further shortcomings in child care and family leave policy will be addressed in the next major Biden administration bill, expected in the next few weeks.]

“Care work” has traditionally been relegated to the “unpaid” column of labor inputs: those who care for infants (mothers, grandmothers, aunts), the elderly (often, a daughter or niece), the disabled (parents, siblings) aren’t reimbursed for what is called a “labor of love” – but it’s labor, nonetheless, and it’s very hard labor to boot. The U.S. doesn’t have paid family or medical leave as a core element of its social welfare programs (only around 17% of American workers enjoy such benefits), which means that workers (the vast majority of whom are women) who withdraw, either temporarily or permanently from the job market to care for an infant, parent, or disabled relative are out of luck.

In the case of those who can afford outside labor to perform the labor of caretaking, the people who enter their homes are largely women of color: “Care is one of the strongest pillars of our economy, yet those who do this work – disproportionately Black and brown women, often immigrants – are under-supported, undervalued and under-compensated, if compensated at all.

During the past year (the pandemic year), “in addition to losing jobs, women were forced out of the labor force entirely at four times the rate of men, most often due to the fact that caregiving responsibilities disproportionately fell on women. Between January and December 2020, more than two million women left the labor force entirely, including 564,000 Black women and 317,000 Latina women.”

It is ironic that while home care and daycare are very expensive (most of both fields are privatized, with for-profits contracting out workers), remuneration for workers in these fields is shockingly low: home health care workers earn an average of $17,200 yearly, and daycare workers, $25,510. Average pay for home health workers nationwide is just over $12 an hour, meaning that while they work fulltime, many such workers (est. 50%) and their families live in poverty. And this poverty is costly to the country, too: they are eligible for Medicaid, they are eligible for public housing vouchers, their children are eligible for free meals – all benefits picked up by the government and paid for by the taxpayer, even though fulltime work should always provide not a minimum, but a living wage. There’s a gaping difference.

As more enlightened countries have long realized, providing publicly-funded universal pre-K, in-home elder and disabled care helps not just individual families struggling to care for their loved ones; it’s good for the economy as a whole. For every 10 jobs created in care work, an additional 5 are created in the wider economy – an excellent ROI.

Newly-elected Congressman Jamaal Bowman (NY-16) makes the powerful argument that “care jobs” be seen as an equivalent to Green New Deal jobs:

“[T]hey are already relatively low-carbon, and are becoming even more essential as we cope with the health impacts of climate change. We need to make these fast-growing jobs the high-paying, unionized jobs of the future, just as we do in the green energy and manufacturing sectors. Fundamentally, the next economy will be about caring for each other, our communities, and the planet. That means we need to think of climate and care investments as comprising one holistic, integrated agenda – and not prioritize one over the other in the recovery effort.”

The amount the Administration has earmarked for home and community-based care, $400 billion, amounts to 20% of the American Jobs Plan ($2 trillion) and has surprised even advocates. Admittedly, it’s a massive investment. However, long-term care has been chronically underfunded for like, forever in the U.S., and this amount is partly an acknowledgement of our shameful attitude towards the elderly and disabled and partly a much-belated effort to catch up – even partly, even belatedly – with other countries:

Long-term care in the United States has been brutally underfunded for decades, and this is especially true for anyone receiving care at home. Though most long-term care for elderly and disabled people is funded by Medicaid, for those not experiencing poverty, the cost can be staggering and unattainable. And the accommodations are less than desirable. According to a 2019 poll by the Nationwide Retirement Institute, most Americans would rather die than live in a nursing home. That poll was taken before COVID-19 swept through. In at least one instance, corpses literally piled up.”

Nursing home care really cannot serve as a viable model for warehousing our elderly and disabled, as we’ve seen during the pandemic. Congregate settings operated mostly by for-profits which are interested in their bottom line and care little about quality care of residents (a generalization, but not an egregious one – consider deaths in nursing homes during the pandemic if you disagree) just don’t work, or work only on such a small scale that they can’t offer anything like the volume of care the aging U.S. population needs. Advocates and families want their elderly and their disabled relatives to remain at home if at all possible, but for most middle-class families, that’s so costly an option that it can scarcely be contemplated (thus, many middle-class working women drop out of the job market to care for elderly parents – from a short-term economic standpoint, it’s cheaper for them not to work and provide care than it is to hire in-home care).

Even for those families eligible for publicly-sponsored in-home care, waitlists are interminable (estimate: 800,000 people currently waitlisted), and this is one reason why that $400 billion, though enormous, is not incomprehensible – it’s going partly to clear the waitlists for care in every state: “According to the Kaiser Family Foundation, the federal government spent $71 billion on home and community-based services in 2018. How much would it cost to clear out the existing waiting lists to access HCBS services? In late 2017, the Congressional Budget Office unofficially told Senate staff and disability advocates that it would take $150 billion to clear out the existing wait list in every state, according to a source close to the issue.”

The details of how this funding will be allocated to states are unclear as yet, but will clarified as the American Jobs Plan makes its way through Congress. Possibly the funding, which basically doubles the current amount available for in-home care over the next decade, will be funneled through the Money Follows the Person program established in 2005 (although this program was allowed to lapse in 2016), in which the federal government provided money to states to move persons in institutions home; the program (like the nursing home program itself) was administered through Medicaid, and only those eligible for Medicaid were eligible to participate.

As we noted in our infrastructure post on water, the devil makes his home in the details of any massive funding program – something of this magnitude will almost certainly require a lot of human infrastructure at the federal, state and local levels – or at least, an expansion of Medicaid administrative personnel, assuming it’s ultimately administered through Medicaid. This is not a minor issue: “The scale of the problem is significant. The number of seniors is projected to grow by more than 40 million, approximately doubling, by 2050, while the population older than 85 will nearly triple. Unlike most other industrialized nations, the United States does not provide a public long-term-care benefit for all older adults.”

One crucial point that remains to be clarified is whether only persons on Medicaid will continue to be eligible for such assistance – if so, the program will do nothing to alleviate the cost burden on the U.S.’s shrinking middle class:

If focused solely on improving the Medicaid backlog, Democrats’ home-care investment may do little to alleviate the cost pressures for elder care bearing down on middle-class families. Retirees do not qualify for Medicaid unless they are below a certain asset limit — $2,000 in most states —which means many burn through their life savings to pay for care services.” In short, “This is far more ambitious than any president has ever proposed for Medicaid long-term-care recipients. It’s a really big deal and a huge, huge step from where we are. But there’s nothing for you if you’re not a Medicaid beneficiary. There are far more non-Medicaid recipients receiving long-term care — and he’s not helping them at all.” (Howard Gleckman, long-term care expert at the Center for Tax Policy)

Interested in learning more? The advocacy group Caring Across Generations provides background, current news and frequent updates.

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