The Cost of No Medicare Reform: What Industry and Government Would Pass on to Consumers, Investors, Taxpayers, and Workers

(Archived document, may contain errors)

October 16, 19 9 5

THE COST OF NO MEDICARE REFORM: WHAT INDUSTRY AND GOVERNMENT WOULD PASS ON TO CONSUMERS, INVESTORS.TAXPAYERS, AND WORKERS

By David H. Winston, Christine L. Olson, and Rea S. Hederman If an unreformed Medicare program is to be able to pay the hospital bills of today's workers when they reach retirement, industry and government will have to pass on additional yearly costs of at least $7.4 billion to investors and consumers. In addition, workers will face additional annual costs of at least $115.7 billion in direct taxes and reduced wages. These costs will be the result of the additional payroll taxes, on top of current payroll taxes, needed to assure long-term fiscal sol- vency of the cash-strapped Medicare hospitalization trust fund if no reforms are enacted. The reason the burden is so heavy on employees is that an increase in payroll taxes technically is shared by both the employer and the employee. Experience indicates that about 88 percent of the cost of addi- tional employer taxes is passed on to workers in the form of reduced wages and compensation. I Moreover, the cost of stabilizing the hospital trust fund is only part of the necessary burden if re- forms are not implemented. To cover the rising costs of Part B, which covers physicians' costs, Congress would have to raise taxes even further. The current financial status of Medicare is precarious. Without significant structural reform of the system or increases in the current payroll tax to maintain the level of benefits and spending, Medi- care will go bankrupt. For Medicare to remain financially solvent and legally able to pay for hospi- tal care for today's "baby boomers" when they retire, Congress needs either to find additional money for the hospital trust fund or to slow down its rate of spending. Trustees'Tax Options. The seven members of Medicare's Board of Trustees have determined that the Medicare Hospitalization (111, or Part A) Trust Fund that finances hospital services for the elderly will be insolvent by 2002. In addressing the tax question, the trustees have outlined three possible options to solve the financing problem if no structural reforms are enacted: a short-term op- tion of an immediate 1.3 percent additional payroll tax, needed to keep the hospital program solvent for 25 years; an intermediate option of a 3.52 percent payroll tax, needed now to FYI #67195

1 The 88 percent is based on such analyses as Jonathan Gruber and Alan B. Krueger, 'The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers Compensation Insurance," Tax Policy and Economy (199 1); Jonathan Gruber, "The Incidence of Mandated Maternity Benefits," American Economic Review Vol. 84 (June 1994); and Lawrence H. Summers, "Some Simple Economics of Mandated Benefits," American Economic Review, Vol. 79, No. 2 (May 1989).

make the hospital program permanently solvent; and a high-cost option of a 3.9 percent payroll tax, needed if no action is taken until the actual depletion of the Medicare trust fund in seven years.2 For purposes of econometric analysis, the authors of this study used the trustees' intermediate option of a 3.52 percent payroll tax, under which Congress, rather than adopt structural changes in the pro- gram, would keep Medicare basically the same and finance the same level of benefits and projected costs through tax increases. Under this scenario, the trust fund would be able to pay for hospital care for the foreseeable future, not just for the next 25 years. V Under this option, an additional tax of 3.52 percent of taxable payroll would be Afshared" between employers and employees. According to earnings data by industry taken from the March 1994 Current Population Survey, the total yearly cost of this additional HI payroll tax would have been $123 billion, or about two percent of Gross Domestic Prod- uct, had such a tax gone into effect in 1993. On average, using an 88 percent "pass through," and had the tax increase been in effect in 1993, the combined d 'irect tax and indirect wage loss to employees would have been about $862 per employee, for a total cost to employees of $115.7 billion (out of the $123 billion).3 The amount of new tax not paid directly by employees or indirectly passed through to them would take the form of additional costs to customers and investors. The analysis delineates the impact by industry of a 3.52 percent increase in the HI payroll tax. Overall, us- ing the 88 percent "pass through" effect on employee wages and compensation, and had the tax been in effect in 1993, industry would have $7.4 billion to pass on to consumers and inves- tors, rather than to employees. If the tax were imposed now, that number could be much larger because of the growth in earnings since 1993. V Retail trade, educational services, and public administration would be the hardest hit by such a tax, together shouldering nearly $15 billion, or 25 percent of the cost of the additional tax before passing it on to employees, customers, and investors. The retail trade industry alone will have to pass at least $800 million on to customers and investors, with educational services and public administration passing on $542 million and $487 million, re- spectively. Unlike the private sector, public-sector employers do not have the luxury of passing on costs such as additional Medicare payroll taxes to customers and investors. Taxes must be increased or programs cut to pay for whatever costs are not passed on to employees in the form of reduced wages and compensation. Moreover, taxpayers potentially could fund a larger share of the burden of the additional payroll tax than customers and investors in the pri- vate sector since government pay scales and contracts could restrict their ability to pass on ad- ditional costs to employees.

2 For a discussion of the trustees' tax options, see Stuart M. Butler, 'Ile High Cost of Not Reforming Medicare," Heritage Foundation F Y.L No. 56, May 4, 1995. 3 See Robert E. Moffit, John C. Liu, and David H. Winston, "What Americans Will Pay If Congress Fails to Reform Medicare: The State and Congressional District Impact," Heritage Foundation F. YL No. 62, September 19, 1995.

APPENDIX COST CALCULATION ASSUMPTIONS

Cost of HI Tax by Standard Industrial Classiflcation Code The national aggregate of employee earnings by industry was derived from the March 1994 Cur- rent Population Survey. These earnings are for 1993. The cost calculations assume the payroll tax in- crease had been in effect that year; the normal growth in earnings means that the payroll tax and its associated costs would be higher in 1996 and subsequent years. Due to the nature of self-reported income surveys, the CPS generally underestimates earnings. In order to develop a multiplier to adjust the CPS-reported earnings, we compared the CPS total with the national employee and proprietor earnings reported in the Statistical Abstract of the United States table on national income in 1993 (as determined by the U.S. Bureau of Economic Analysis, Survey of Current Business, April 1994). After April 1986, all state and local employees were required to pay Medicare taxes. In 199 1, however, the law was amended to allow those hired before that date to opt out. The Congressional Research Service has estimated that as of March 1994, 1.7 million workers were not covered by Medicare. Using the 1.7 million figure, we removed the exempt workers and their earnings from each industry class based on the distribution of state and local government employees in each cate- gory according to the 1994 Current Population Survey. Based.on a survey of economic literature estimating the "pass-through" wage effect of employer mandates by health care econometrics firm Lewin-VHI, we assumed 88 percent of the cost of the ad- ditional tax to be passed on to employees in reduced compensation. We also assumed that the pass- through had fully occurred. Therefore, we assumed the total cost of the additional Medicare tax to employees to be 88 percent of the business's share of the Medicare tax (about 1.56 percent) in addi- tion to the 1.76 percent tax on wages paid directly by the employee. The cost of the HI tax to customers, investors, and taxpayers is the remaining 12 percent not passed through to employees. Note on "Children." The Current Population Survey classifies all wage earners under the age of 15 as "children." Because these workers, who include such individuals as young farm workers, are not officially considered part of the labor force, the CPS does not collect specific industry informa- tion on these wage earners. The CPS,'however, does not collect income data for wage earners under 15, and so in reality the wages identified by CPS for "children" category are the results of miscod- ing by CPS and actually accrue to wage earners aged 15 and above. These miscoded wage earners and their employers do pay the HI payroll tax on reported income. Thus they are included in this analysis under the separate, non-industry-specific category of "children" used by the CPS.

rable 1-

Kh CoSt of No Reform: The Impact of an Additional 3.52% Medicare Payroll Tax By Industry, Data from 1993

Total of Extra Extra Payroll Total Extra Cost to Standard Payroll Taxes Paid Taxes Paid Employees= Direct Cost to Industrial by Business and Directly by Tax + 88% Pass Consumers and Classification Industry Employee Business Through Investors tT 04& $1-10,03-0,000 , -.4-4-1,407 wr .000 035,063 Agriculture $01;7;",,7-94'0'0'0-:::@ $958,897,000' $1.802,726,000 $115,068"0'00 K. MAW, -7.000 -@ : .--$6 .73-M 060 Construction -\u223\'a7J.1.. . $7,259,524,000 $3,629,762,000 $6,823,953,000 $435,571,000 VN y- t 74q ,7 130 Tobacco I .; . . .... -S, . .. ...... $79,870,000 $39,935,000 $75,078,000 $4,792,000 P -:000 .01 e. WE- 1A.. Ans (600bo I,51-IS2 Apparel and Finished Textile $747,784,000 '$373,892,000 $702,917,00 .0. $44,867,000 R I i La(k mmww wr - M.M8..... @ 0 171-172 Printin Publishing, and Allied Inclu'sim, $2,026,548,000 :in $1,013,274,000 $1.904.955,000 $121,593,000 44 Mcal 91 200-201 Petroleum and Coal Products $263,038,000 $131,519,000 $247,256,000 $15,782,000 Xw . .... .. X ..:::$7: 952 ea Am 17W 220-222 Leather and Leather Products 163,106,000 $81,553,000 $153,320,000 $9,786,000 ,12* %vow F-w-- si 242 Furniture and Fixtures $614.542,000 $307,271,000 $577,669,000 $36,'873,000

K. . ...... ,$. 270-280,301 Primary and Not Specified Metals $1,015,702,000 $507,851,000 $954,760,000 $60.94 .2,000 2., F-aVr 4 al A W 7 ,4 @VW k" 74zy' i'; - @Rt $89 -M.000 4JPvw . .0,4,6 1.;000. k. -@, ;;661 310 332 Machinery, Not Including Electrical $3,216,416,000 $1,608,208,000 $3,023,431,000 $192,985,000 'a C n- r, !; R-0 ""T' 4-1 0 WA- i i. - - @i X@ @ @@:. $ 351 Motor Vehicles and Equipment $1,696,662,000 $848,44 1,000' $ i.595,069,000 $101,813,000 7 360-370 @Mrl$74; JX@ Wk'16466001 Other Transportation Equipment $1.072.302,000 $536,151,000 $1,007,9-6.- 4,000 $64,338,000 @'W,7 fj* *2 490 W01; Toys. Amusements and Sporting Goods 390 .71. W. 0. $156,378,000....... $78,189,000 $146,995'.000 $9,383,000 10-95 I-OWE'Vok @8,660. J @4% @4 2 :'M:$5,977,624,000 $381,550,000 14 Cg 2,099.546,'000.. mily AOP000. 450-472 Utilities and Sanitary Services $2,267,000,000 $1,133,500,000 $2,130,980,000 $136,020,000 M500, iorri 580-691 Retail Trade $13,334,470,000 $6,667,235,000 $12,534,402,000 $800,068,000 M 'n .,1.1 . . I. . . . d 7, 10-6 -".'@J.. 711-712 Insurance and Real Estate Service $5,507,002,000 $2,7 53,501,000 $5,176,582,000 $330,420,000 so- Od'@' SK,86@1.000' 751-760 Repair Services $1,527,970,000 $763,985,000 $1,436,292,000 $91,678.000 0 'P . ...... 0,0W At@ .00 .4c 999,000 . 762-791 Personal Services. Except Private Household $2,233,962,000 $1,116,981.000 $2,099,924,00''0 $134,038,000 n@ $778.458MY', 2(kr-463,501 000. 812-830, 832- 840 Health Services, Not Hospitals $5,766,310,000 $2,883,155,000 $5,420,331,000 $345,979,000 -W 2?J @550136 $@.5 N 1,@- 9,bW 841, 872-893 Other Professional Se@ites' $7,468,608,000 $3,734,304,000 $7,020,492,000 $448,116,000 ?@7 @rykce-s:. 00. 861-871 Social Services $1,709,950,000 $854,975,000 $1.6.07,353,000 $102,597..000 2 5,000, :4487,173 h Children $1,560,000 $780,000 $1,466,000 $94,000 -T . ....... .006 00 1 5 T424,000, i ':" - el 15'ii Source: The Heritage Foundation Medicare Cost Projection Model.

Cost of No Reform: The Impact of an Additional 3.52% Medicare Payroll Tax By Amount of Tax, Data from 1993

Total of Extra Extra Payroll Total Extra Cost to Standard Payroll Taxes Paid Taxes Paid Employees= Direct Cost to Industrial by Business and Directly by Tax + 88% Pass Consumers and Classification Industry Employee Business Through Investors 333+470 6667 "'z 1[p 4@ ............ . .12 5.3@, 1 @$Iilw 68,000 842-860 Educational Services $9,024.75.4,000 $4,512,377,000 $8, 83,269,000 $541,485,000 "bile; dMim 'adi, @i $4,059779401 :$7,632.3g51000 !I04b7,1 @i'1600 A? 841, 872-893 Other Professional Services $7,468,608,000 $3,734,304,000 $7,020,492,000 $448,116,000 $7 Z59 3,'@29 762M, V-W 4 _--s -@ - .. .7111000 400-432 Transportation $6,359,174,000 $3,179,5a7,000 $5,977,624,000 $381,550,000 . ... .. ... .... . $5_ 3 69)000 Hpspl., S tr@ A-11, g:,li,9.600 812-830, 832. 840 Health Services, Not Hospitals $5,766,310,000 $2,883,155.000 $5,420,331,000 $345,979,000 W -.an MOM! SUAl"n.n 2A. RK5;Q@ J PP P,, 3 B2AW a4 @fj 500-571 Wholesale Trade $5,439.2 -3-2,000 $2,719,616,000 $5,112,878,000 $326,354,000 ZNZ.000 @3 eff, 700-710' Banking and Other@ Finance $4,571,946,000 $2,285,973,000 .$4,297,629,000 $274,317,000 J flffii ...... ...... .... ......... ot , IW 54 216,44.6,W0 '208. C.. `$3- 431. 000' . P2.985,000 T @dc V, 08 ac ir 19- A ".10f 0. C, r@ 6C 6caug 340-350 Electrical Machinery. Equipment, and Supplies $2,408,992,000 $1,204,496,000 $2,264,452,000 $144,540.bOO J, Okbw 762-791 Personal Services, Except Private Household $2,233,962,000 $1.116,981,000 $2,099,924,000 $ 134,038,000 U3 6:@ $2 9546000 '442 -!r,_c_o1r1riiu,7 9 K014,000 9 180-192 Chemicals and Allied Products $2.048,520,000 $1,024,260,000 $1,925,609,000 $122,911,000 "XXI 6 vP 6 n-1; dwis iWdAd"'---- 7., 72, 0: 's, A ledl i b1b" 000 a S,063 Agriculture $1,917,794,000 $958,897,000 $1,802,726,000 $115,068.OM 04 W;@ $1 bkfilboo :00 416,MWI ""T 861-871 cial Services $1,709,950,000 $854,975,000 $1,'607.353,000 $102,597,000 N:$1.595 .000 q ..13 800-810 Entertainment and Recreation Services $1,556,916,000 $778.458,000 $1,463,501,000 $93,415,000 6 .RIUM 9WOUP 2Z WD.MJW 66 @_VW .;' I,"' L7 . .0 i. 281-300 Fabricated Metals $1,494,342,000 $747,171,000 $1,404,681,000 $89,661,000 @!ffl _.%Xt . ........ 7' @7 X@ M @ !@! _ - 1. ...51000 360-370 Other Transportation Equipment $1,007,964,000 $64,338,000 $1,072,302,000 $536,151,000 no W@, @:02;@ P0,13 2,1.1 .0.'LS* IWITY-N. K W ObdK .4-2.b00 371-382 Professional and Photoequip!pent, Watches $961,718,000 $480,859,000 $904,015,000 $57,703,000 M= e ah @ftp .......... L5;f 352 Aircraft and Parts $760,774,000 $380,iB7.000 $715,128,000 $4'5',6'4-6',0'00 :$ @2 W21. "..-@.'@' ::' @ M_ - @x 60 @nr --t-,A04,867.'000 Fi iM&T- 3.7 .0@ZPQQ@ -Xr. M. 1.. @3, *... , . . . 210-212 Rubber and Miscellaneous Plastics Products $716,952,000 $358,476,000 $673,935,000 $43,017,000 s 7;bl, Vid -Pm ".11W t r 242 Furniture and Fixtures $614,542,000 $307,271,000 $577,669,000 $3'6.873,000 e@La@d (M\u223\'a7.. V_ .-.,W@. PDAW 9'.4 14-1 4 132-150 Textile Mill $568,352,000 $284,176,000 $534,251,000 $34,101,000 ... . ...... -8@W lj@. $2. 65' 5 DOO &9'120D ..,$204710,000; :"3 @84 200-201 Petrole m and Coal Products $263,038,000 $ 131,519,000 $247,256,0W $15,782,000 ... . .... .... .. ... . ...... 9. '@H ld.*_ . . . .... ... Odb 2,7nfid t:0,; 031,032 Forestry and Fisheries $223,446,000 $111,723,000 $210,039,000 $13,407,000 0 Te r:`an`d"LeitherPradUE6 'V.6 4-9@\u223\'a7D ---..$I.53.32G.000 `,'@A?!7861000 P M. 39.0-11 Toys, Amusem@qts.@ncl Sporting Goods $15078,000 $78,189,000 $14"K.90,5,000 $9,383,000 -@,:Tobiiko $75 3 1W .9,\u223\'a7 5,0 k(= @4.792,,QX Children $1,560,000 $780,000 $1,466,000 $94,000 S .6, .6ff -fd,@ i. I S. 06 '4fB6A Aiioclo @7,J8'2,006,000 Sourcw The Heritage Foundation Medicare Cost Projection Model.

INDUSTRY CLASSIFICATION CODES

There are 236 categories for the employed, with I additional category for the experienced unem- ployed. These categories are aggregated into 51 detailed groups and 23 major groups. Numbers in parentheses are the 1987 SIC code equivalent. "Pt" means part, "n.e.c." means not elsewhere classi- fied.

CODE INDUSTRY

000-009 not used

35002 AGRICULTURE

10 Agricultural production, crops (01) 11 Agricultural production, livestock (02) 12 Veterinary services (074)

013-019 not used

20 Landscape and horticultural services (078)

021-029 not used

30 Agricultural services, n.e.c. (071, 072, 075, 076)

031-032 FORESTRY AND FISHERIES 31 Forestry (08) 32 Fishing, hunting, and trapping (09)

033-039 not used

040-050 MINING

40 Metal mining (10) 41 Coal mining (12) 42 Oil and gas extraction (13)

043-049 not used 50 Nonmetallic mining and quarrying, except fuel (14) 051-059 not used

60 CONSTRUCTION (15, 16,17) 061-099 not used

100-392 MANUFACTURING

100-222 NONDURABLE GOODS

100-122 Food and kindred products

100 Meat products (20 1) 101 Dairy products (202) 102 Canned, frozen and preserved fruits and vegetables 103-109 not used

110 Grain mill products (204) 111 Bakery products (205) 112 Sugar and confectionery products (206)

113-119 not used

120 Beverage industries (208) 121 Miscellaneous food preparations and kindred products (207,209) 122 Not specified food industries

123-129 not used

130 Tobacco manufactures (21)

131 not used

132-150 Textile mill products 132 Knitting mills (225)

133-139 not used 140 Dyeing and finishing textiles, except wool and knit goods (226) 141 Carpets and rugs (227) 142 Yam, thread, and fabric mills (221-224, 228)

143-149 not used

150 Miscellaneous textile mill products (229) 151-152 Apparel and otherfinished textile products 151 Apparel and accessories, except knit (231-238) 152 Miscellaneous fabricated textile products (239)

153-159 not used

160-162 Paper and allied products 160 Pulp, paper, and paperboard mills (261-263) 161 Miscellaneous paper and pulp products (267) 162 Paperboard containers and boxes (265)

163-170 not used

171-172 Printing, publishing, and allied industries 171 Newspaper publishing and printing (271) 172 Printing, publishing, and allied industries, except newspapers (272-279)

173-179 not used

180-192 Chemicals and allied products 180 Plastics, synthetics, and resins (282) 181 Drugs(283) 182 Soaps and cosmetics (284)

183-189 not used

190 Paints, varnishes, and related products (28@) 191 Agricultural chemicals (287) 192 Industrial and miscellaneous chemicals (281, 286, 289)

193-199 not used

200-201 Petroleum and coal products 200 Petroleum refining (291) 201 Miscellaneous petroleum and coal products (295, 299) 202-209 not used

210-212 Rubber and miscellaneous plastics products 210 Tires and inner tubes (301) 211 Other rubber products, and plastics footwear and belting (302-306) 212 Miscellaneous plastics products (308) 213-219 not used

220-222 Leather and leather products 220 Leather tanning and finishing (311) 221 Footwear, except rubber and plastic (313, 314) 222 Leather products, except footwear (315-317, 319) 223-229 not used

230-392 DURABLE GOODS

230-241 Lumber and wood products, exceptfurniture 230 Logging (241) 231 Sawmills, planing mills, and millwork (242, 243) 232 Wood buildings and mobile homes (245)

233-240 not used

241 Miscellaneous wood products (244, 249) 242 Furniture andfixtures (25)

243-249 not used 250-262 Stone, clay, glass, and concrete products

250 Glass and glass products (321-323) 251 Cement, concrete, gypsum, and plaster products (324, 327) 252 Structural clay products (325) 253-260 not used

261 Pottery and related products (326) 262 Miscellaneous nonmetallic mineral and stone products (328, 329) 263-269 not used

270-301 Metal industries

270 Blast furnaces, steelworks, rolling and finishing mills -331 271 Iron and steel foundries (332) 272 Primary aluminum industries (3334, part 334, 3353-3355, 3363, 3365)

273-279 not used

280 Other primary metal industries (3331, 3339, part 334, 3351, 3356, 3357,3364,3366,3369,339) 281 Cutlery, handtools, and general hardware (342) 282 Fabricated structural metal products (344)

283-289 not used

290 Screw machine products (345) 291 Metal forgings and stampings (346) 292 Ordnance (348)

293-299 not used

300 Miscellaneous fabricated metal products (341, 343, 347, 349) 301 Not specified metal industries 302-309 not used 310-332 Machinery and computing equipment 3 10 Engines and turbines (35 1) 311 Farm machinery and equipment (352) 312 Construction and material handling machines (353)

313-319 not used

320 Metalworking machinery (354) 321 Office and accounting machines (3578, 3579) 322 Computers and related equipment (3571-3577)

323-330 not used

331 Machinery, except electrical, n.e.c. (355, 356, 358,359) 332 Not specified machinery

333-339 not used

340-350 Electrical machinery, equipment, and supplies 340 Household appliances (363) 341 Radio, TV, and communication equipment (365, 366) 342 Electrical machinery, equipment, and supplies, n.e.c. (361,362,364,367,369)

343-349 not used 350 Not specified electrical machinery, equipment, and supplies 351-370 Transportation equipment 351 Motor vehicles and motor vehicle equipment (37 1) 352 Aircraft and parts (372)

353-359 not used

360 Ship and boat building and repairing (373) 361 Railroad locomotives and equipment (374) 362 Guided missiles, space vehicles, and parts (376) 363-369 not used

370 Cycles and miscellaneous transportation equipment (375, 379) 371-381 Professional and photographic equipment, and watches 371 Scientific and controlling instruments (381, 382 except 3827) 372 Medical, dental, and optical instruments and supplies (3827, 384, 385)

373-379 not used 380 Photographic equipment and supplies (386) 38lWatches, clocks, and clockwork operated devices (387)

382-389 not used

390 Toys, amusement, and sporting goods (394) 391 Miscellaneous manufacturing industries (39 except 394) 392 Not specified manufacturing industries 393-399not used

400-472 TRANSPORTATION, COMMUNICATIONS, AND OTHER PUBLIC UTILITIES

400-432 TRANSPORTATION

400 Railroads (40) 401 Bus service and urban transit (41, except 412) 402 Taxicab service (412)

403-409 not used 410 Trucking service (421, 423)

411 Warehousing and storage (422) 412 U.S. Postal Service (43)

413-419 not used

420 Water transportation (44) 421 Air transportation (45) 422 Pipe lines, except natural gas (46) 423-431 not used

432 Services incidental to transportation (47)

433-439 not used

440-442 COMMUNICATIONS

440 Radio and television broadcasting and cable (483, 484) 441 Telephone communications (48 1) 442 Telegraph and miscellaneous communications services (482, 489)

443-449 not used

450-472 UTILITIES AND SANITARV SERVICES

450 Electric light and power (49 1) 451 Gas and steam supply systems (492, 496) 452 Electric and gas, and other combinations (493)

453-469 not used

470 Water supply and irrigation (494, 497) 471 Sanitary services (495) 472 Not specified utilities

473-499 not used

500-571 WHOLESALE TRADE

500-532 Durable Goods

500 Motor vehicles and equipment (50 1) 501 Furniture and home furnishings (502) 502 Lumber and construction materials (503)

503-509 not used

5 10 Professional and commercial equipment and supplies -504 511 Metals and minerals, except petroleum (505) 512 Electrical goods (506)

513-520 not used

521 Hardware, plumbing and heating supplies (507) 522-529 not used

530 Machinery, equipment, and supplies (508) 531 Scrap and waste materials (5093) 532 Miscellaneous wholesale, durable goods (509 except 5093)

533-539 not used

540-571 Nondurable Goods

540Paper and paper products (511) 541 Drugs, chemicals and allied products (512, 516) 542 Apparel, fabrics, and notions (513)

543-549 not used 550 Groceries and related products (514) 551 Farm-product raw materials (515) 552 Petroleum products (517)

553-559 not used 560 Alcoholic beverages (518) 561 Farm supplies (5191) 562 Miscellaneous wholesale, nondurable goods (5192-5199)

563-570 not used 571 Not specified wholesale trade

572-579 not used

580-691 RETAIL TRADE

580 Lumber and building material retailing (521, 523) 581 Hardware stores (525) 582 Retail nurseries and garden stores (526) 583-589 not used

590 Mobile home dealers (527) 591 Department stores (53 1) 592 Variety stores (533)

593-599 not used

600 Miscellaneous general merchandise stores (539) 601 Grocery stores (541) 602 Dairy products stores (545)

603-609 not used

610 Retail bakeries (546) 611 Food stores, n.e.c. (542, 543, 544, 549) 612 Motor vehicle dealers (551, 552) 613-619 not used 620 Auto and home supply stores (553) 621 Gasoline service stations (554) 622 Miscellaneous vehicle dealers (555, 556, 557, 559) 623 Apparel and accessory stores, except shoe (56, except 566) 624-629 not used

630 Shoe stores (566) 63 1 Furniture and home furnishings stores (57 1) 632 Household appliance stores (572) 633 Radio, TV, and computer stores (5731, 5734) 634-639 not used

640 Music stores (5735, 5736) 641 Eating and drinking places (58) 642 Drug stores (591) 643-649 not used

650 Liquor stores (592) 651 Sporting goods, bicycles, and hobby stores (5941, 5945, 5946) 652 Book and stationery stores (5942, 5943) 653-659 not used

660 Jewelry stores (5944) 66 1 Gift, novelty, and souvenir shops (5947) 662 Sewing, needlework and piece goods stores (5949) 663 Catalog and mail order houses (5961) 664-669 not used 670 Vending machine operators (5962) 671 Direct selling establishments (5963) 672 Fuel dealers (598)

673-680 not used

681 Retail florists (5992) 682 Miscellaneous retail stores (593, 5948, 5993-5995, 5999)

683-690 not used

69 1 Not specified retail trade

692-699 not used

700-712 FINANCE, INSURANCE, AND REAL ESTATE 700 Banking (60 except 603 and 606) 701 Savings institutions, including credit unions(603, 606) 702 Credit agencies, n.e.c. (61)

703-709 not used 7 10 Security, commodity brokerage, and investment companies (62, 67) 711 Insurance (63, 64) 712 Real estate, including real estate-insurance offices -65

713-720 not used

721-760 BUSINESS AND REPAIR SERVICES

721 Advertising (731) 722 Services to dwellings and other buildings (734)

723-730 not used

731 Personnel supply services (736) 732 Computer and data processing services (737) 733-739 not used

740 Detective and protective services (7381, 7382) 741 Business services, n.e.c. (732, 733, 735, 7383-7389) 742 Automotive rental and leasing, without drivers (75 1)

743-749 not used

750 Automotive parking and carwashes (752, 7542) 751 Automotive repair and related services (753, 7549) 752 Electrical repair shops (762, 7694)

753-759 not used

760 NfiscelIaneous repair services (763, 764, 7692, 7699)

761-791 PERSONAL SERVICES

761 PRIVATE HOUSEHOLDS (88)

762-791 PERSONAL SERVICES, EXCEPT PRIVATE HOUSEHOLD

- - - --------

762 Hotels and motels (701)

763-769 not used 770 Lodging places, except hotels and motels (702, 703, 704) 771 Laundry, cleaning, and garment services (721 except part 7219) 772 Beauty shops (723)

773-779 not used

780 Barber shops (724) 781 Funeral service and crematories (726) 782 Shoe repair shops (725)

783-789 not used

790 Dressmaking shops (part 7219) 791 Nfiscellaneous personal services (722, 729)

792-799 not used

800-810 ENTERTAINMENT AND RECREATION SERVICES

800 Theaters and motion pictures (781-783, 792) 801 Video tape rental (784) 802 Bowling centers (793) 803-809 not used

8 10 Nfiscellaneous entertainment and recreation services (791, 794, 799)

811 not used

812-893 PROFESSIONAL AND RELATED SERVICES

812-830 MEDICAL SERVICES, EXCEPT HOSPITALS 812 Offices and clinics of physicians (801, 803)

813-819 not used

820 Offices and clinics of dentists (802) 821 Offices and clinics of chiropractors (8041) 822 Offices and clinics of optometrists (8042)

823-829 not used 830 Offices and clinics of health practitioners, n.e.c. (8043, 8049)

831 HOSPITALS (806)

832-840 MEDICAL SERVICES, EXCEPT HOSPITALS (Continued)

832 Nursing and personal care facilities (805)

833-839 not used

840 Health services, n.e.c. (807, 808, 809)

841 OTHER PROFESSIONAL SERVICES (also includes codes 872-893) 841 Legal services (81)

842-860 EDUCATIONAL SERVICES

842 Elementary and secondary schools (821)

843-849 not used

850 Colleges and universities (822) 851 Vocational schools (824) 852 Libraries (823)

853-859 not used

860 Educational services, n.e.c. (829)

861-871 SOCIAL SERVICES 861 Job training and vocational rehabilitation services -833 862 Child day care services (part 835) 863 Family child care homes (part 835) 864-869 not used

870 Residential care facilities, without nursing (836) 871 Social services, n.e.c. (832, 839)

872-893 OTHER PROFESSIONAL SERVICES (Also includes code 840) 872 Museums, art galleries, and zoos (84) 873 Labor unions (863)

874-879 not used 880 Religious organizations (866) 881 Membership organizations, n.e.c. (861, 862, 864, 865, 869) 882 Engineering, architectural, and surveying services -871 883-889 not used

890 Accounting, auditing, and bookkeeping services (872) 891 Research, development, and testing services (873) 892 Management and public relations services (874)

893 Miscellaneous professional and related services (899) 894-899 not used

900-932 PUBLIC ADMINISTRATION

900 Executive and legislative offices (911-913) 901 General government, n.e.c. (919)

902-909 not used

9 10 Justice, public order, and safety (92) 911-920 not used

921 Public finance, taxation, and monetar@ policy (93) 922 Administration of human resources programs (94) 923-929 not used

930 Administration of environmental quality and housing programs (95) 931 Administration of economic programs (96) 932 National security and international affairs (97) 933-990 not used

991 Assigned to persons whose labor force status is unemployed and whose last job was Armed Forces

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