The Benefits of Paying Direct Care Workers a Higher Wage

Direct care staff are integral to a senior care facility’s quality and success. Though these positions are highly valuable, many remain underpaid. According to LeadingAge’s new report, Making Care Work Pay, increasing direct care worker pay could lead to many benefits, including the potential to help reduce staff shortages.

This new report provides valuable insights that senior care facility owners and administrators may want to consider when evaluating their hiring and staff salary practices. We’ve summarized the key points for you below.

The Problems Caused by Low Pay

Low pay causes multiple issues for both staff and for facilities. Low pay can:

• Lead to increased staff turnover, meaning staff don’t get the chance to gain experience that makes them stronger caregivers
• Cause chronic staffing shortages, meaning some residents may go without the care they need
• Jeopardize staff and resident health, as employees who receive low pay feel pressure to keep working while sick

In 2019, care facility aides earned an average of $13.87 per hour, and more than a third of aides in residential care facilities earned below a living wage. Varying weekly work hours can also contribute to financial insecurity.

In 2018, approximately 12.6% of direct care workers lived in poverty. Workers who were in poverty tended to have fewer job benefits, with 14.2% of direct care staff lacking health insurance and 84.4% lacking retirement benefits in 2019. As a result, in 2018, 56.5% of direct care workers received public assistance.

How Higher Pay Can Help

Increasing direct care staff salaries can help to counteract many of these issues. Providing staff with higher pay can:

• Encourage staff to stay in their occupation and remain at their jobs
• Encourage staff to work more hours at their current jobs
• Attract people from other fields to direct care work to help reduce staff shortages
• Ensure that residents ensure more reliable care, thanks to adequate staffing and less staff turnover

Because caregivers would remain at their jobs for longer periods of time, they would develop the skills, like being able to recognize and prevent pressure ulcers, that they wouldn’t acquire without on-the-job experience. This also improves continuity of care, and staff are better able to provide residents with the consistent, quality, and attentive care that can lead to better health outcomes for residents.

It’s also important to recognize that higher pay would help to reduce staff stress, an important element in mental and physical health. Greater financial security can lead to an improved quality of life, and with less stress and distractions, caregivers can better focus on their work.

What a Pay Raise Would Mean

The analysis detailed in the report found that raising direct care worker pay to the living wage within the worker’s state could not only increase worker productivity, but could also result in important economic improvements. If pay were raised to a living wage in 2022, then 75.3% of workers would receive a pay increase. Pay increases would average 15.5%, resulting in an approximate $9.4 billion in wage raises. Given that direct care industry spending is predicted to reach more than $400 billion in 2022, that $9.4 billion wage increase is modest.

Framing the wage increase against the benefits a facility would see also justifies the change:

• Staff would be encouraged to work longer hours and the direct care field could attract new workers. Together, this would have the effect of boosting field employment by 9.1%, or adding 330,000 new direct care workers.
• Higher pay could reduce turnover by 0.7 and 1.7%. This reduced turnover could save facilities hiring and training costs, and could possibly cover the pay increase. Increased productivity would also help to offset higher pay costs.
• Communities where direct caregivers work and live would also see an economic boost, and by 2030, caregiver spending could result in an economic footprint that’s $17 to $22 billion larger than it would have been without a pay increase.
• Higher pay would reduce caregivers’ reliance on public assistance programs by between $912 million to $1.6 billion each year.

Direct care workers perform important, skilled work. Paying them a higher wage doesn’t just result in important benefits for a senior care facility and its residents, but also indicates to caregivers that their skills are valued.

You can learn more about the insights of this study by reading the full report.

Paige Cerulli

Paige Cerulli is a contributing writer to i Advance Senior Care.