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Direct Care Worker Wages Are Increasing but Challenges Persist

By Stephen Campbell | September 30, 2019

Hourly wages for home care workers and nursing assistants improved slightly over the past decade, according to new research released earlier this month by PHI. The inflation-adjusted median wage for home care workers increased from $10.83 in 2008 to $11.52 in 2018, and wages for nursing assistants rose from $12.98 to $13.38 over the same period. Every September, to commemorate Labor Day, PHI releases annual data on the direct care workforce.

At least two factors have contributed to the marginal gain in wages for these workers. First, long-term care leaders have successfully advocated for Medicaid reimbursement rate increases in states across the country – in some cases, securing “wage pass-through” provisions to ensure that a portion of the additional funding is allocated to workers’ earnings. Also, many states and localities have increased their minimum wages in recent years, which has likely boosted compensation for home care workers, who tend to earn less than nursing assistants.

More Progress Is Needed

Notwithstanding this modest progress, the economic well-being of direct care workers remains inadequate. Home care workers earn a median annual income of just $16,200 and nursing assistants typically earn $22,200.

Because of low annual earnings, one in six home care workers lives in poverty and half of the workforce relies on some form of public assistance. While nursing assistants are slightly better off, 44 percent still live in low-income households (defined as below 200 percent of the federal poverty level) and one in three relies on some form of public assistance.

Destabilizing Economic Conditions

Given the strong economy and tight labor market, long-term care providers are competing for workers with employers across other sectors, many of which have increased wages to gain an edge in attracting job seekers.

Reports from the field suggest that this competition has exacerbated turnover in the direct care workforce. Workers have left their jobs for higher-paying opportunities in retail stores, fast food restaurants, and distribution centers, to name a few examples.

Recent data corroborate these reports. In their 2018 survey of private-duty home care agencies, Home Care Pulse found that turnover among home care workers was 82 percent—the highest turnover rate ever measured by that survey. Nursing homes are also struggling with high turnover and widespread job vacancies; for example, PHI’s analysis of nursing home staffing data found that one-third of nursing homes contracted with staffing agencies to fill vacant nursing assistant positions last year.

Without a large-scale intervention, recruitment and retention challenges will worsen in the future. The direct care workforce numbered 4.5 million in 2018, but there will be 7.8 million job openings in this workforce from 2016 to 2026. More than half of these openings (4.2 million) will be in home care, where more than a million new jobs will be created and millions of existing workers will leave the home care field or exit the labor force altogether. By 2026, there will be nearly 680,000 job openings in nursing homes, as well, caused almost entirely by workers leaving the field.

Filling such a large number of vacancies will require long-term care leaders to consider job quality holistically for direct care workers. In addition to increased compensation, direct workers would also benefit from better training, supervision, and opportunities for advancement, among other interventions that strengthen recruitment and retention in this sector. Implementing these changes—and ensuring the long-term stability of this workforce—hinges on commitment at every level, from front-line managers to state policymakers.

Read our new research on U.S. home care workers here.

Read our new research on U.S. nursing assistants here.

Stephen Campbell
About The Author

Stephen Campbell

Data and Policy Analyst
Stephen Campbell is a Policy Research Associate at PHI. In this capacity, he contributes research, analysis, and writing on issues affecting the direct care workforce with the goal of impacting state and national policy.
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