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Low Wages, Insufficient Hours, & High Rates of Poverty

Improving compensation would promote worker retention and improve care for consumers.

THE PROBLEM

Low wages, part-time work, and the resulting need to depend on public benefits shape the economic realities of most direct care workers. The median hourly wage for home care workers in the U.S. is a little more than $10—a wage that, when adjusted for inflation, has remained virtually stagnant for the last 10 years. In turn, the median annual income for home care workers, most of whom work part-time or only during part of the year, is $13,800.[1]

Most home care workers report wanting to work full time, but for various reasons they’re unable to obtain full-time hours; these reasons include employers who hire part-time workers to avoid paying benefits and save costs, and erratic scheduling due to the unpredictable nature of clients’ needs. Because of the low wages they are paid and their unreliable work schedules, 23 percent of home care workers live in households below the federal poverty line, compared to seven percent of U.S. workers overall. Similarly, nursing assistants working in nursing homes struggle with high poverty rates, despite earning marginally higher incomes than home care workers.[2]

Without a living wage, direct care workers must rely heavily on public benefits to support themselves and their families. Fifty-two percent of home care workers and 39 percent of nursing assistants rely on some form of public support such as food and nutrition aid, Medicaid, or cash assistance. Additionally, the nature of this work—low pay, irregular hours—makes it difficult for many direct care workers to qualify or pay for employer-based or individual health coverage.

PROMISING DEVELOPMENTS

New research from PHI quantifies the beneficial effect of state Medicaid expansion on health care coverage for direct care workers: the uninsured rate of this workforce dropped by 26 percent between 2010 and 2014 (from 28 to 21 percent), helping half of a million direct care workers afford health care despite their low wages.[3]

The proliferation of minimum wage initiatives around the country has drawn attention to the wage concerns of low-income workers. In 2013, the U.S Department of Labor extended wage and overtime protections under the Fair Labor Standards Act (FLSA) to home care workers nationwide. Unfortunately, reports from the field show that this rule has not been effectively enforced. Furthermore, since the rule went into effect in October 2015, advocates across the industry spectrum have signaled the importance of complying with the new rule with appropriate levels of Medicaid funding instead of capping work hours, a response that further challenges the ability of older adults and people with disabilities to find the caregivers they need.

Sources

  1. PHI. 2017. U.S. Home Care Workers: Key Facts. Bronx, NY: PHI.
  2. PHI. 2017. U.S. Nursing Assistants Employed in Nursing Homes: Key Facts. Bronx, NY: PHI.
  3. PHI. 2017. The Impact of the Affordable Care Act on the Health Coverage of Direct Care Workers. Bronx, NY: PHI.

Key Takeaways

Low wages and meager annual incomes contribute to high turnover among direct care workers.
If paid caregivers lose their health coverage, will older people lose their paid caregivers?
Wage increases must be met with appropriate Medicaid funding and reimbursement rates.
 

By the Numbers: Wages & Benefits

$10.49

Median hourly wage for home care workers in 2016. Source: PHI, 2017

26%

Percentage of home care workers without health coverage. Source: PHI, 2017

23%

Percentage of home care workers living below the federal poverty line (FPL). In comparison, nine percent of U.S. workers live below the FPL. Source: PHI, 2017

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