Growing Demand for Direct Care Workers Underscores Pressing Need to Invest in Job Quality, New PHI Report Reveals

PHI, the nation’s leading authority on the direct care workforce, released its annual research report, “Direct Care Workers in the United States: Key Facts 2024.” This comprehensive report provides critical insights into the state of the direct care workforce, highlighting both the surging demand for these essential workers, economic challenges brought about by low pay and a preponderance of part-time hours, and resulting challenges to workforce recruitment and retention.

Key Findings:

An Aging Nation, Rapid Workforce Growth, and Future Demand:

• As our nation’s population of older adults grows dramatically, demand for direct care workers is escalating.  Over the past decade, the direct care workforce has expanded dramatically, growing from 3.5 million workers in 2014 to over 5 million in 2023—an addition of more than 1.5 million new jobs.
• Growth in demand shows no signs of slowing. The number of adults aged 65 and older is projected to increase from 57.8 million in 2022 to 88.8 million by 2060. Employment projections indicate an additional 860,000 new direct care jobs will be needed from 2022 to 2032. When factoring in replacements for workers who leave the field, the industry will see a staggering 8.9 million job openings within the same decade.

Wage Challenges and Economic Insecurity:

• Despite the critical importance of their work, direct care workers continue to face significant economic challenges. The median hourly wage for these workers stands at $16.72, with home care workers earning even less at a median of $16.13 per hour. While there was a modest wage increase from 2022 to 2023—median wages for all direct care workers rose by $0.85 per hour, adjusting for inflation—the economic reality remains stark for many. A concerning 37 percent of direct care workers live in low-income households, and nearly half (49 percent) rely on public assistance to make ends meet.
• The report also highlights a critical concern regarding benefits cliffs, where small wage increases can lead to a loss of public benefits, potentially resulting in net income losses for workers. This complex issue underscores the need for thoughtful policy solutions that ensure wage increases translate into real economic gains for direct care workers.
• A quarter of direct care workers also provide unpaid family caregiving for older adults, compared to 19 percent in the overall workforce. Additionally, 31 percent of direct care workers are parents to children under 18, with 13 percent having children under five living at home. These statistics underscore the multiple demands placed on workers Tin their professional and personal lives.

Demographic Insights and Equity Concerns:

• The demographic makeup of the direct care workforce reflects broader issues of equity and representation in the labor market. The workforce is predominantly made up of women (85 percent) and is racially diverse (64 percent people of color), with immigrants constituting 28 percent of workers—compared to 17 percent in the broader U.S. labor force. Breaking this down further, 27 percent of home care workers are Black or African American and 26 percent are Hispanic or Latino. In nursing homes, the proportion of Black or African American nursing assistants rises to 37 percent. These figures highlight the overrepresentation of women and people of color in these often-undervalued roles, pointing to systemic issues of racial and economic inequity that demand attention.

Sector-Specific Trends:

• The report also delves into sector-specific trends, revealing unique challenges and developments across different care settings. The home care workforce has more than doubled in size over the past decade, reflecting growing preferences for home- and community-based care. In nursing homes, the report finds that nursing assistants face alarmingly high rates of workplace injuries, being nearly five times more likely to be injured on the job compared to the average U.S. worker. The residential care sector has seen fluctuations in its workforce, losing over 38,000 jobs from 2020 to 2022, but showing signs of recovery with a gain of 20,000 jobs in 2023.

“This report underscores the critical importance of direct care workers for the future of care in the United States, while also highlighting the significant challenges they face,” said Jodi M. Sturgeon, president and CEO of PHI. “As demand grows, it’s crucial that we address issues of low wages, limited benefits, and lack of career advancement opportunities to ensure a stable and qualified workforce.”

Policy Implications

This new research underscores the need for immediate action from policymakers, health care providers, and advocates, including:

1. Sustained investments in job quality improvements across all direct care settings.
2. Targeted efforts to address the risk of benefits cliffs as wages incrementally increase.
3. A focused approach to addressing equity issues within the workforce, particularly for women, people of color, and immigrants.
4. Improved data collection and reporting on workforce trends.
5. Implementation and evaluation of new policies like the Medicaid Access Rule, which requires states to ensure 80 percent of Medicaid payments for certain home care services go to worker compensation.
6. Increased support for workers balancing multiple caregiving roles, both paid and unpaid.

“The challenges they face are significant, but recognition is growing of the need to invest in direct care workers as a lifeline to older adults, people with disabilities, and family caregivers,” added Sturgeon. “By transforming direct care jobs into quality careers, we can ensure economic stability for the people who care for us every day and ensure high-quality care and support for all who need it, in the settings of their choice.”

Read our full report at https://www.phinational.org/resource/direct-care-workers-in-the-united-states-key-facts-2024/