Caregiving Crisis and the $15 Minimum Wage

It was one of those uncomfortable moments that journalists both dread and love.

Sitting in a Pasadena conference hall amidst a sea of caregivers and nursing home operators, I listened to a panel of experts outline the essential skills needed by caregivers.

The advice was stellar: besides clothing and toileting seniors, caregivers should be compassionate and empathic. They should also investigate the elder’s younger years to connect meaningfully with them. In addition, they should mine subtle emotional states to uncover the underlying causes of distress.

But….. all for minimum wage?

“These are great presentations,” I asked the panel, “but there’s something that doesn’t add up. We’re talking about direct care workers who are poorly-paid, yet we’re asking them not only to care for an elder’s physical needs, but be emotional detectives, and also act as highly-skilled mental health professionals?”

There was a long pause.

“Well, I’ve seen it work,” came one panelist’s sheepish reply.

Most experts insist that caregivers for our precious elderly should be paid more than the $9 or $10 an hour made by fast food workers. And so, out in force at July’s White House Conference on Aging,  were purple-shirted “Fight for $15” workers demanding higher wages.

We’re in the midst of the greatest demographic shift in the history of planet Earth, and our caregivers will be an essential part of that transition. By 2030, California’s aging population will explode from today’s 5 million to 8.4 million – one in five Californians.

Caregivers will be an essential piece to that puzzling and uncertain future.

“This is really skilled and challenging work,” says Ai-jen Poo, director of the National Domestic Workers Alliance. “Caregivers are nutritionists, therapists and often times physical therapists. They’re personal trainers. They are cooks. It’s incredibly emotional work and incredibly skilled work. And to do it well you have to be incredibly focused on who you’re caring for to ensure their dignity and autonomy is intact. And all of that requires a lot of emotional intelligence and creativity.”

Still, there is considerable opposition to a $15 hourly caregiver wage.

Some home care agencies lament that a $15 hourly wage will force them out of business, even as they charge families $30 an hour.

There have also been reports from Seattle, the first city to pass a $15 minimum wage (San Francisco and Los Angeles have followed) that some workers are now limiting hours to remain on public assistance.

In California, passage of a $15 minimum wage would mean workers for the state’s Medi-Cal home care program, In Home Supportive Services (IHSS), would jump nearly $5 from the current average of just over $10 an hour.  That increase — most  likely — would be split between the federal government and the state.

Yet Poo, who also co-directs the advocacy group Caring Across Generations, counters all of these arguments with a simple retort.

“Any business that relies on a model of paying employees poverty wages shouldn’t exist,” she insists, adding that many caregivers live paycheck-to-paycheck. “We’re going to have to find a way to employ a work force in a way that’s sustainable.”

Two other statistics drive the point home.   In 2020 – just five years from now – the United States will need more caregivers than either teachers or law enforcement professionals. Yet industry turnover exceeds 50%.

The result: a profound shortage of caregivers.

As Poo describes, today’s system simply isn’t sustainable. And it’s no longer problematic just for The Greatest Generation, but for the insistent 10,000 older adults who turn 65 each day: The Baby Boom Generation.

From schools to cars to electronics, Baby Boomers demand quality. And when it comes to care, they will transform the world of caregiving just as they have politics, business and shopping.

In their hands, the days of half-hearted caregiving will slowly disappear.

Investors know this. Contrary to fears that home care agencies will fold, new businesses are sprouting up everywhere, while others are merged or sold.

Caregiving is big business. Hidden in rooms across the country are actuaries crunching numbers to ensure their home care agencies remain profitable – even when paying employees $15 an hour.

Not only will Baby Boomers demand better caregivers, a $15 hourly wage will immediately draw a more qualified work force to meet those needs.

Meanwhile, higher wages will also benefit online caregiving agencies like CareLinx and Honor.  Operating as online matchmakers for families and caregivers and charging less than brick-and-mortar home care agencies – sometimes half as much – these virtual firms do everything traditional agencies do, sometimes better. In an old school industry where simply having a warm body to send out has been enough, these virtual firms depend heavily on quality control and thus work closely with families to ensure their needs are being met.

In a recent decision, a federal appeals court ruled that caregivers are entitled not only to minimum wages but overtime, a huge victory for the U.S. Department of Labor, which will continue to push for fair treatment of caregivers.

In the future, look for caregivers to gain even more respect.

So, expect successful home care agencies – physical or virtual – to conform to higher industry standards by designating caregivers as employees rather than outside contractors with no benefits.

CareLinx is a good example of this new paradigm, which differentiates it from the splashy newcomer Honor. Its caregivers set their own rates – typically between $15 and $18 an hour. The company takes nothing from their wages but instead adds a 15% fee. Perhaps most important, caregivers are considered employees of the families who hire them, so make payments into funds like Social Security and unemployment. This is critical for caregivers who may need to file for unemployment benefits.

In the past, we’ve constantly framed the wage discussion in relation to caring for our parents and grandparents. But that’s not the issue any longer. The real issue now is this: How much do we pay caregivers to take care of us?

We can’t afford $15 an hour?

CareLinx president and CEO Sherwin Sheik believes $15 is just the beginning.

“I think professional caregivers deserve considerably more than $15 an hour,” he says. “A quality caregiver can actually extend an elderly person’s life.  As America’s population continues to age… there is going to be a dramatic shortage of professional caregivers, and I truly hope that drives up hourly wages for these workers since they are taking care of our loved ones in a very vulnerable point in their lives.”

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