A remarkably great time to be in the senior living business
Perhaps it's too soon to call 2018 the Golden Age of Senior Living. Then again, maybe it's not. There are some powerful signs that this is a great time to be in the business.
The first is that senior living construction is at or near an all-time high. We don't typically see buildings rising while expectations are falling.
Second, operators are benefitting from some very favorable policy adjustments. It's getting easier than ever to tap into Medicaid dollars and other government funding streams. Meanwhile, a pro-business White House and Congress are taking major strides to prevent new regulations while de-fanging many rules currently on the books.
Need capital for a new building, renovation or remodeling project? The bankers are practically lining up to give you money – at rates and terms that remain ridiculously favorable.
And by the way, the Silver Tsunami is just about ready to reach the shores of senior living.
As if those perks were not enough, the Supreme Court gave this sector not one but two wet kisses on Wednesday. First, the court ruled that public-sector workers who opt not to join unions can't be required to help pay for collective bargaining.
Pro-union officials unsuccessfully argued that workers who don't pay dues should not be able to share in the benefits accrued by those who do.
Writing for the 5-4 majority, Justice Samuel Alito served up the understatement of the year when he noted the court recognizes “that the loss of payments from nonmembers may cause unions to experience unpleasant transition costs in the short term.”
Then came the all-important but: “We must weigh these disadvantages against the considerable windfall that unions have received under Abood for the past 41 years.”
The bottom line is that the ruling is yet another defeat for organized labor, which has seen its ranks steadily shrinking in recent decades. As recently as 1983, 20% of all American wage and salary workers (about 17.7 people) belonged to unions. By 2017, the numbers had dropped to 10% (roughly 14.8 million).
It's unlikely we are going to find too many senior living operators devastated by that trend. But as they say on the late-night infomercials: Wait, there's more.
Justice Anthony Kennedy announced on the same day that he will be retiring from the nation's highest court, effective July 31.
In practical terms, that means President Trump can replace a judge he could sometimes count on with one who will be far more dependable. Given the pro-business leanings of the current administration, it's probably not too difficult to discern where the replacement judge will line up in future cases pitting firms against their workers.
It is hard to believe so many tumblers are now aligned so well for this sector. That reality might not be apparent right now. But the next time this sector falls upon hard times, it surely will be.
John O'Connor is editorial director of McKnight's Senior Living. Email him at firstname.lastname@example.org.