Growing Demand for Direct Care Workers Underscores Pressing Need to Address Job Quality Challenges
Our nation’s population of older adults is growing dramatically, bringing the essential role of direct care workers into sharp focus in recent years. Direct care workers are foundational to the care economy, providing vital care and support to older adults and people with disabilities. However, PHI’s latest annual research report reveals that despite their indispensable contributions, direct care workers continue to face significant challenges that require urgent attention if we are to meet growing demand for their services.
PHI’s new report, “Direct Care Workers in the United States: Key Facts 2024,” offers a comprehensive, up-to-date overview on direct care workers. Our report delves into the demographic makeup of the workforce, outlines their roles and responsibilities, examines critical issues with the quality of their jobs, and projects future job openings in the field. It provides in-depth analyses of three key segments within this workforce: home care workers, residential care aides, and nursing assistants in nursing homes.
Unprecedented Workforce Growth and Escalating Demand
The report underscores the critical importance and rapid expansion of the direct care workforce in the United States’ long-term care system.
Over the past decade, the direct care workforce has grown from 3.5 million workers in 2014 to over 5 million in 2023—an addition of more than 1.5 million new jobs. Demand will only increase in the future, with the number of adults aged 65 and older projected to increase from 57.8 million in 2022 to 88.8 million by 2060.
As a result, employment projections indicate that the direct care field will add more than 860,000 new jobs from 2022 to 2032, outpacing job growth in any other single occupation in the country.
When factoring in occupational transfers and labor force exits, the analysis reveals an even more staggering figure: an estimated 8.9 million total job openings in direct care from 2022 to 2032. This highlights a strong need for improvements to the quality of direct care jobs, to improve workforce recruitment and retention.
Wage Issues and Economic Challenges Hamper Recruitment and Retention
Our report reveals persistent significant economic challenges faced by workers in this field, despite their crucial role. While there has been incremental wage growth over the past decade, largely driven by state and federal investments in Medicaid programs and pandemic-related funding, wages remain concerningly low overall.
PHI’s analysis found that the median hourly wage for all direct care workers stood at $16.72 in 2023, with home care workers earning the least at a median of $16.13 per hour. These low wages, combined with high rates of part-time work, resulted in median annual earnings of just $25,015 for direct care workers. The economic implications of these low wages are severe: the data shows that 37 percent of these workers live in low-income households, and nearly half (49 percent) rely on some form of public assistance.
Some positive trends in wage growth have been observed, particularly from 2022 to 2023, with median wages for all direct care workers increasing by $0.85 per hour (adjusted for inflation). Home care workers saw the largest increase of $1.16 per hour. However, this followed a decrease of $0.72 per hour from 2021 to 2022, illustrating the volatile nature of wage growth in this sector.
Particular attention should also be focused on the risk of benefits cliffs, which refer to the potential loss of eligibility for public benefits and lower net income that can accompany incremental but insufficient wage growth. Without further investment, economic challenges for this workforce will remain persistent—as will challenges to recruitment and retention in the face of growing demand.
Demographic Insights and Critical Equity Concerns
The report emphasizes that the direct care workforce is predominantly made up of women (85 percent across all roles) and racially diverse (64 percent people of color). Immigrants constitute 28 percent of the workforce, compared to 17 percent in the broader U.S. labor force. These figures highlight the overrepresentation of people of color in these often-undervalued roles, pointing to systemic issues of racial and economic inequity that must be addressed.
Our research reveals that a quarter of direct care workers balance unpaid elder caregiving roles, compared to 19 percent in the overall workforce. Furthermore, 31 percent are parents to children under 18, with 13 percent having children under the age of 5. These statistics underscore the multiple responsibilities many direct care workers juggle, adding layers of complexity to their already demanding jobs.
Sector-Specific Findings and Challenges:
Home Care
Our analysis shows that while home care workers saw the largest wage increase from 2022 to 2023, they still earn the least among direct care workers. The home care workforce has more than doubled in size over the past 10 years, from 1.4 million in 2014 to more than 2.9 million in 2023, reflecting the growing preference for home and community-based care.
PHI’s report notes the potential impact of the new Medicaid Access Rule in driving improvements in home care job quality. This rule requires states to ensure that at least 80 percent of Medicaid payments for homemaker, home health aide, and personal care services are spent on compensation for these workers. PHI will be closely monitoring the implementation and impact of this rule.
Nursing Homes
The research reveals that nursing assistants face significantly higher risks of workplace injuries compared to the average U.S. worker. They are nearly five times more likely to experience workplace injuries, with these injuries requiring a median of 10 days away from work or job transfer/restriction.
The report also highlights the ongoing vulnerability of nursing home staff and residents to COVID-19. Since 2020, there have been nearly 2.1 million confirmed cases of COVID-19 among nursing home residents (and more than 172,000 deaths) and 1.9 million confirmed cases among nursing home staff. Alarmingly, the data shows that only 31 percent of nursing home residents were up-to-date with their COVID-19 vaccines as of July 2024.
The nursing home sector has seen a decline in workforce numbers, from 616,550 nursing assistants in 2014 to 458,590 in 2023. This decline aligns with a 14 percent decrease in the number of nursing home residents from 2018 to 2023, reflecting broader shifts in long-term care service delivery.
Residential Care
PHI’s research also reveals fluctuations in the residential care aide workforce in recent years. The sector lost over 27,000 jobs from 2020 to 2021 and over 11,000 from 2021 to 2022, but then gained back more than 20,000 jobs in 2023. Despite this recent uptick, employment numbers remain below 2020 levels.
Our analysis indicates that improving job quality in residential care requires significant investments through both private and public channels, given the prominent role of private payers and providers in this sector.
Looking Forward
As the demand for direct care services continues to rise, the insights provided in this report are crucial for shaping policies and practices that support this essential workforce and ensure high-quality care for millions of Americans.
The direct care workforce stands at a critical juncture. Addressing persistent issues of low wages, challenging working conditions, and equity concerns is essential to meeting growing demand. Now is the moment to transform the quality of direct care jobs, foster viable direct care careers, and ensure access to critical services for all those who need them.
