Based on the top line of the New York economy, the city is again defying forecasts of a slowdown in the great jobs juggernaut. The city added 52,000 jobs in the first six months of the year, far more than anyone expected.
But there is an asterisk, and it is a pretty big one.
The job gains are increasingly the result of home health care, according to an updated analysis by the city’s Independent Budget Office. A third of the total job increase between the first quarter of 2016 and the just-ended second quarter of 2019 results from the home health care sector. Remember how once Wall Street dictated whether the city’s economy was thriving or plunging? Now it is this much less glamorous—and less lucrative—sector that drives total job gains.
On the upside, a job is a job. Home health care workers are providing a needed service and keeping many people out of hospitals and nursing homes. Neither education nor skills are a barrier, so it is a way into the workforce for many immigrants and other people with limited schooling.
On the downside, the jobs just don’t pay much—a little bit more than the minimum wage—and that’s primarily why economic reports emphasize how much of the city’s job growth is in low-paying occupations (80% in the first quarter). Home health care has limited upward mobility, unlike hotels and restaurants. Most of the bill is footed by government through Medicaid and Medicare.
In fact, as the IBO report noted, the surge in jobs is directly related to the Consumer Directed Personal Assistance Program, which lets senior citizens and the disabled pick their own in-home health care provider, including a family member. The chosen person is then hired by a professional employer organization.
It seems unlikely the expansion of home health care jobs can continue unabated, especially because the CDPAP rules are changing next year. The IBO has calculated the implications of an end to the home health care boom: job gains of 34,000 next year and 37,000 in 2021—paltry by the standards of the past decade.
From now on, I’ll be tracking both the top-line number on jobs and the bottom-line one—namely job increases excluding home health care.
Greg David writes a regular column for CrainsNewYork.com.