Many home health aides and other direct care workers are going to get raises. An important court decision on Friday, an aggressive lobbying campaign by unions, more generous state minimum wage laws, and—perhaps most important of all—growing demand for paid home care by consumers—will inevitably drive up wages for these aides.
The question is: How will older adults, younger people with disabilities, their families, and government pay for this extra compensation?
On Aug. 21, the DC Court of Appeals upheld the right of the Labor Department to extend federal wage and overtime rules to direct care workers. But that case is just the latest step down the road of giving these workers, who are a key to maintaining quality of life for many frail seniors and younger people with disabilities, a much-needed raise.
A typical home care aide is paid less than $10-a-hour, which is about $21,000-a-year for a full-time worker. She’s unlikely to receive health insurance, sick or vacation days, or retirement benefits. She is more likely to be injured on the job than a coal miner. And her average wage is $3-an-hour less than what a veterinary technician makes. It is worth asking why we pay people more to care for our cats than our frail parents?
The home care industry claims higher wages will drive people into nursing homes but that seems unlikely given people’s strong preference for staying home and the enormous cost gap that will still remain between home care and nursing facilities. However, those pay raises unquestionably will put greater financial strain on families who already struggle to pay for long-term supports and services.
My Urban Institute colleague Melissa Favreault recently estimated that someone turning 65 today will on average incur nearly $140,000 in lifetime long-term care costs and pay about $75,000 out-of-pocket. Medicaid will pay most of the rest—about $47,000. About 15 percent of those turning 65 will run up more than $250,000 in costs for paid services.
Because so much of that will pay for aides and other direct care workers, raises will inevitably increase expenses.
That’s the reason why some advocates for people with disabilities strongly oppose the new rules. They argue that if Medicaid must pay higher wages to home care workers, the program will inevitably cut other benefits. This dispute has generated enormous tension between supporters of home care workers and some disability advocates, who ought to be allies.
Friday’s appeals court ruling upheld new Labor Department rules that will extend federal minimum wage and overtime rules to home health aides and other direct care workers. Those rules were supposed to take effect last January, but were reversed by a federal district court judge. Friday’s ruling overturned the judge’s decision and reinstated the Obama Administration regulations. A three-judge panel unanimously ruled that the Labor Department has broad authority to interpret the federal Fair Labor Standards Act and apply it to home care workers.
For years, aides had been exempted from these labor law protections because they were considered companions, not employees. But the Labor Department said the industry has changed dramatically since the 1970s and argued the exemption should no longer apply.
Some representatives for the home care industry vow to keep fighting, either in court or in Congress. But in important ways, the train has already left the station. Unions representing home care workers have been aggressively advocating for a $15-an-hour wage. And the Administration seemed to embrace this initiative at the recent White House Conference of Aging.
The court’s ruling is likely to have a fairly modest effect on minimum wages since direct care workers already average more than the $7.25 federal minimum and 29 states have set their minimum wages higher than the feds. The overtime rules, however, could have a greater impact.
Still, this legal dispute increasingly seems like a rear-guard action. Home health aides will inevitably be paid more in coming years. And at least some of those higher wages will be passed on to those who receive their help, or to federal programs such as Medicaid. The better question is not whether aides will get raises. It is where will the money come from to pay them?