(Complete employment chartbook here. Great way to hunt for longs and shorts!)
Politics. His reputation led many to eye rolling when The Wall Street Journal published Senator Joe Manchin’s declaration that Congress needed a “strategic pause” in its 18-month long spending spree.
Because Sen. Joe Manchin so loves the klieg lights, it is easy to dismiss his posturing on hot topics like reconciliation. After all, despite representing a state that voted for Donald Trump over President Biden by 39 points in 2020, Sen. Manchin almost always votes with his party.
(Of course, half the time he has served, the Senate was either under control of Republicans or evenly divided between the parties as it is now. It is easy to vote for stuff your constituents may not like if there is little threat of becoming law, but let’s not get swallowed by the details.)
Notwithstanding his reputation, Sen. Manchin’s op-ed was notable for this: he lists inflation as his first reason to press the pause button. “Now Democratic congressional leaders propose to pass the largest single spending bill in history with no regard to rising inflation, crippling debt or the inevitability of future crises.”
Manchin may yet submit to the fever dream that has the White House and congressional leaders conjuring up their youth with visions of completing the unfinished work of Lyndon Johnson’s Great Society programs. In any event, Sen. Manchin has said the quiet part out loud. His constituents, already under pressure from the selective inflation of housing, education and health care are not likely to accept it for food and fuel.
The Fed's talking point, helped along by Friday’s jobs report, is that inflation is transitory.
Just maybe not in West Virginia.
Policy. The incongruence between the reality of the labor market and the reports continues to grow. On Friday, the Bureau of Labor Statistics reported a disappointing result of 235k jobs added based on their survey of 144k establishments and government entities. Health care lost about 5k jobs.
Yet, the July JOLTS data indicates there are 1.5M job openings in health care and social assistance, a multi-decade high.
To be certain, some of the people that left the workforce chose retirement. Anecdotes abound and AMN’s earnings release bears out the short supply of nurses and therapists. Among low wage, low skilled health care workers, there are more options that are less stressful and have fewer health consequences. Work from home, something not easily accomplished in health care, offers greater flexibility to manage childcare and commuting expenses.
As hard hearted as it may sound, several policies in the reconciliation bill could make things go from bad to worse. The refundable childcare tax credit reduces the pressure for women – who make up most health care workers – to work full time. An elimination of the eligibility ceiling for subsidization of ACA health plans makes new or small business ventures more appealing. The Civilian Climate Corps, if it mimics similar mid-20th century efforts like the Civilian Conservation Corps or the Works Progress Administration, could take valuable young workers out of the labor supply.
For the health care industry, what was going to be a one-to-two-year problem of increased acuity brought on by delayed and foregone care, is turning into a decade long struggle for workers, treating sicker patients and, happily, what promises to be a shift in the productivity paradigm.
Power. There are many laudable portions of the White House’s Build Back Better agenda which forms the core of budget reconciliation. Pandemic preparedness and research funding are but two. There is also a certain obsolescence that hangs over it, like the post-COVID labor realities cannot be reconciled with a need to conform to a vision that is no longer relevant.
COVID-19 appears to have left workers in charge. Demands for higher wages and greater flexibilities are being met. Yet Build Back Better places a lot of emphasis on union membership and participation. Public school enrollment dropped during COVID and may not ever recover yet the White House’s agenda seeks to allocate funds for teacher training and hiring.
Most puzzling, until August when the hospital trade groups got involved, the White House agenda made no provisions for the massive shortage of health care workers that has emerged and getting worse. The oversight was made more egregious by the largess proposed for staffing and training of Medicaid’s Home and Community-based Services program, a great cost-saving program but small in comparison to other demands of the system.
Of course there are political considerations that favor unions, if not workers themselves. Unfortunately passing big ticket bills to solve problems that may not exist provides a lot of room for resistance among moderates, like Joe Manchin, to build.
Assuming some form of reconciliation passes, there should be some money for training the health care workforce. The labor disruption problem, however, is not easily fixed. As a hospital leader we know recently put it, “I don’t know if it takes two or three nurses to replace a retiring one, I just know it isn’t one.”
Have a great Labor Day.
Emily Evans
Managing Director – Health Policy
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