Hochul’s Budget for New York Ignores Direct Care Workforce Crisis

Across New York, more than 584,000 direct care workers—including home health aides, personal care aides, and nursing assistants—are currently providing care to older adults and people with disabilities in private homes, residential care communities, and nursing homes. The need for workers will continue to rise, driven by the state’s aging population. As a result, according to PHI research, New York will need to fill over one million direct care job openings in this sector between 2020 and 2030, far outpacing job growth for any other occupation in the state.

And yet, the Governor’s FY25 budget proposal for New York fails to recognize the crucial role the direct care workforce plays in the lives of New York residents, the crisis-level shortage of these workers, and the economic impact of failing to sustain and invest in these essential workers.

Through written testimony this month, PHI called out this crucial oversight by the Administration and urged the legislature to take action and invest in this workforce.

Even in a challenging budget year, the case for investing in direct care jobs—including in wages, benefits, training, and other job quality elements—is strong. A living wage for direct care workers would lift existing workers out of poverty and financial precarity while also helping address the structural, intergenerational inequities that impact the women and people of color comprising this workforce.  Due to inadequate compensation, more than half (51%) of New York’s direct care workers access some form of public assistance to survive.  Beyond the beneficial impact for workers and their families, investing in a wage increase would also yield a reduction in these public assistance expenditures.

Higher wages and better benefits would also make direct care jobs more attractive to new job seekers, which is a critical step toward building the pipeline into these jobs and filling workforce gaps. A more stable and sufficient direct care workforce would also help overcome service gaps and ensure continuity and quality of care for consumers. This outcome would be invaluable for those who require paid support to live their daily lives with independence, dignity, comfort, and safety—but there is enormous potential value for our health and LTSS system as well. On balance, the evidence indicates that home care can help maintain optimal levels of health and function while preventing or delaying more costly outcomes such as emergency department visits, hospitalizations, and early nursing home admissions.

Family caregivers will also benefit from investments in the direct care workforce, which in turn will benefit our economy overall. Nationally, more than 53 million family members (and neighbors, friends, and other individuals) contribute an estimated $470 billion annually in unpaid care.  Among these unpaid caregivers, the majority report having experienced at least one change in their own employment situation due to caregiving, such as reducing hours, taking time off, foregoing a promotion, or giving up paid work entirely. Approximately half report negative financial outcomes such as increased debt, loss of savings, late or unpaid bills, and more, even when they are able to access temporary paid family leave benefits. With more paid care available for respite and ongoing assistance, unpaid caregivers could continue to support their loved ones without reducing their own productivity in the labor market.

Finally, investment in the direct care workforce—one of the largest but lowest-paid occupations in New York—could stimulate consumer spending and job growth overall as workers spend their additional income on clothing, food, health care, transportation, and other necessities – generating new jobs in other sectors of local economies.

Through the FY25 budget process, the legislature must take action in three key areas:

• Compensation: To recruit and retain the direct care workforce requisite to provide all New Yorkers with the quality care and support they need, the legislature must ensure that direct care workers receive total compensation that provides a living wage and economic security. The median hourly wage for direct care workers in New York is $16.88, $3.67 less per hour than wages for other occupations in the state with similar or lower entry requirements. Low wages also contribute to costly and damaging turnover in this workforce, as direct care workers leave the long-term-care field for higher-paying or more stable opportunities. Raising wages is a fundamental and necessary step, but it must go along with access to full-time and reliable hours, adequate reimbursements to providers, and state support for recruitment and retention strategies that work.
• Training: All workers deserve quality job training, and direct care workers are no exception. Quality direct care job training standards and programs should ensure that all workers acquire the skills, knowledge, and confidence to succeed in their complex roles. Current training standards do not reflect the skills required to adequately support today’s long-term care clients, are siloed across regulatory agencies, and require that direct care workers comply with requirements driven by payment source or waiver rather than by the competencies needed to perform the job. This fractured system impacts the ability of direct care workers to move across settings or serve diverse client populations and limits the state’s ability to cultivate a robust and stable direct care workforce. Direct care workers in New York need a quality state-wide training program that is competency-based, adult learner-centered, covers a range of relational and technical skills related to quality care, and accounts for cultural, linguistic, and learning differences. It should include the opportunity for specialized training and advancement and provide workers with documentation of certification and/or program completion, including connection to employment opportunities.
• Data Collection: Insufficient data on the direct care workforce in New York makes it difficult to quantify workforce shortages and other challenges, monitor workforce trends over time, design policy and practice interventions, and evaluate their impact. To help address this significant gap, the legislature should allocate additional funds to improve the collection, monitoring, and reporting of direct care workforce-related information across all long-term care settings. As a first step, the state should survey all relevant departments and agencies to catalog existing workforce-related data collection mechanisms and to identify gaps and inconsistencies. Going further, the state could fund a survey of direct care workers to gather their firsthand experiences, insights, and recommendations for improving job quality.

Given the omission of this workforce in the Governor’s budget, it is imperative that the legislature act. Not doing so will have a detrimental impact to the state’s long-term care system and economic well-being.