How Poverty Wages Undermine Care

PBS NewsHour Examines Low Wages in Home Care

PBS NewsHour special correspondent Kathleen McCleery reports on the challenge of getting care that’s reasonably priced while still paying caretakers a living wage.

Report: Paying the Price: How Poverty Wages Undermine Home Care in America

Spotlights the need to improve home care wages and benefits in order to stabilize the workforce and ensure quality of care. Includes data/charts, worker stories, and profiles of states and organizations investing in the workforce.

The elderly population is growing at record levels.

Our population is aging dramatically, but we have done little to prepare for this demographic shift. Every day, 10,000 baby boomers turn 65. By 2050, the elder population is expected to more than double, from about 40 million to 84 million, with those in the oldest cohort (85 and older) growing from about 6 million to 19 million. Over the next three decades, tens of millions of these aging Americans will need long-term supports and services in their final years.

One million new home care aides are needed.

Today about 2 million home care aides assist 11 million elders and people with disabilities. These aides fall into two formal occupations tracked by the U.S. Department of Labor: home health aides and personal care aides. Both occupations are expected to grow by nearly 50 percent over the decade 2012-2022, a rate nearly five times higher than the rate of overall job growth in the economy.

Home care pays poverty wages.

The average hourly pay for a home care aide is just $9.61. A full-time home care worker – and there are very few – earns $384.40 a week before taxes, or $1,538 a month. In many areas of the country that’s barely enough to rent an apartment, let alone pay for utilities, food, health care and child care expenses. And these figures don’t even take into account the unpredictable and part-time hours that reduce home care wages even further. The result is median annual earnings of just $13,000 a year.

Turnover is very high.

The poor quality of these jobs makes it increasingly difficult to find long-term workers. Half the home care workforce turns over every year, disrupting the continuity of relationships that is essential to quality care. Only about one in four workers has more than one year of experience on the job. The biggest problem is simple: workers leave because they cannot afford to stay.

Falling wages and part-time hours make low pay even lower.

Home care worker wages declined 5% over the past decade. Not only are home care workers paid low and declining wages, but the hours are often part time and unpredictable. Some clients need care a few hours a day, while others may need only a few hours a week. Though aides often work for more than one client, it can be difficult to patch together full- time work. In addition, if a client becomes ill and goes to the hospital, the worker may lose hours for weeks at a time. As a result, more than half of home care aides work less than full time.

More than half of workers rely on public benefits.

To fill in the gaps, poor families rely on public assistance programs such as Medicaid, food stamps, and housing and heating assistance. Among home care aides, three out of five live in households that receive one or more of these benefits. And though Medicaid often insures children, traditionally working adults have had a hard time accessing coverage. This continues to be the case for home care workers in the 26 states that have refused to expand Medicaid under the Affordable Care Act. Nationally, 40 percent of home care aides earn less than 133% of the federal poverty level, the threshold for Medicaid eligibility under the expanded federal option. Working people should be able to earn a living wage rather than having to rely on public programs.

Solving the care crisis and strengthening home and community-based services means building a committed and skilled workforce that can deliver quality services to elders and people with disabilities in the communities where they live. But poverty wages are undermining progress toward that goal. We must begin now to strengthen the home care workforce by:

1) Raising wages.

It is time to raise the wage for home care workers. Low-wage workers across multiple sectors are calling for a $15 per hour wage floor to lift their families out of poverty. The actions of workers are persuading states and cities across the country to raise the floor by enacting minimum wage increases. The largest increases thus far are in the cities of Seattle and San Francisco, both of which have voted to stem the rise of income inequality by raising their minimum wage to $15 over the next several years. A $15 per hour wage, plus benefits, would go a long way to providing financial security to home care aides and their families and would greatly improve the stability of the home care workforce.

Better wages are also good for the economy as a whole—studies have estimated that that every $1/hour increase in compensation for low-wage workers leads to $1.20 in increased economic activity. That’s because low wage workers, such as home care aides, are more likely to spend these extra earnings immediately basic necessities like food, housing and clothing.

2) Extending minimum wage and overtime protections to home care aides.

Home care aides have been explicitly exempted from the Fair Labor Standards Act since 1974. Recently, the U.S. Department of Labor revised the “companionship exemption” to ensure that the majority of aides would receive federal labor protections, including minimum wage; time and a half for overtime; and payment for all hours worked, including travel time between clients. But the measure, which should have taken effect in January 2015, has been delayed by a federal lawsuit brought by industry trade associations. Ensuring basic labor protections for home care aides is essential to legitimizing home care work as a skilled vocation and to building a skilled, stable workforce that can meet the needs of consumers in the 21st century.

3) Restructuring the work to guarantee full-time hours for more workers.

A better hourly wage is important but not sufficient to increase the income of home care aides. The work needs to be restructured to ensure that those workers who want them are getting full-time hours. At New York’s Cooperative Home Care Associates, for example, aides who have been with the company for three years or more are guaranteed pay for 30 hours per week, even if their hours fall below this threshold. This policy increases family stability, and is a great benefit to workers and the company.

4) Providing paid leave.

The high rate of occupational injury, and the risk to clients if workers come to work sick, make it unconscionable to structure these jobs with no sick leave. Fortunately, we are seeing cities and states begin to pass paid leave bills that offer all working people this basic benefit. Home care aides would benefit from the Healthy Families Act, a proposal in Congress to extend paid leave to 30 million American workers who currently have no paid time off.

5) Improving training.

Home care aides receive little or no training. Better training could help to reduce injuries and improve the quality of care for consumers, particularly those with specialized needs related to dementia or other chronic illnesses. A more skilled workforce offers greater value, making increased pay a better public investment.

6) Offering a real career path.

Currently home care does not offer a path to better wages or better jobs. Designing advanced roles for aides--for example, specializations in MS or Diabetes care or medication management--would encourage workers to grow their skills and stay in the field In addition, home care aides could play a more integral role in managed-care teams, keeping the rest of the team aware of their client’s health status and providing opportunities for early intervention.

7) Giving workers a voice.

Workers provide an important perspective when it comes to improving jobs and home care services. PHI has long encouraged multiple strategies for bringing workers to the table, including worker associations, worker ownership of cooperative businesses, participation in workplace decision making, and collective bargaining.

Many states (which, with federal support, fund and manage home care services for their low-income populations) have given home care aides the opportunity to bargain over wages, benefits, and other workplace issues, thereby improving workforce stability and quality of care.

In addition to winning wage increases, union contracts and other forms of worker participation have helped to establish better training programs, paid time off policies, and matching service registries to help consumers in need of assistance identify workers with the skills and hours available to meet their needs.

PBS NewsHour Examines Low Wages in Home Care

PBS NewsHour special correspondent Kathleen McCleery reports on the challenge of getting care that’s reasonably priced while still paying caretakers a living wage.

PHI's Marquand Discusses How Poverty Home Care Wages Undermine Care

February 26, 2015 - PHI's Abby Marquand discusses the need to improve home care wages and benefits in order to stabilize the workforce and ensure quality of care on America's Work Force Radio with host Ed Ferenc.

US Rep. Ellison Examines Challenges Facing Home Care Workers

February 27, 2015 - US Representative Keith Ellison of Minnesota examines challenges facing the home care workforce. Includes interviews with workers, consumers, and Abby Marquand, director of policy research at PHI.

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