John O'Connor
John O’Connor

Election results giveth. Election results taketh away.

When Donald Trump became president four years ago, one of his first orders of business was to trim back the red tape. Suddenly, rules were loosened. New regulations were put on hold or dismissed. Regulators at numerous oversight agencies became remarkably disinterested in the Sturm and Drang playing out across the American workplace.

If you were running a senior living community, the shift amounted to a welcome reprieve.

Don’t get me wrong. I am not promoting our most recent president as a better choice than Joe Biden. But from strictly a policy perspective, Trump was more of a business person’s ally. On that there can be no debate.

But he was defeated by a man who promised to bring a lot of change. And this week we got a real taste of how that promise might be kept.

Tuesday, House Democrats introduced the Raise the Wage Act of 2021, which mandates a $15 minimum hourly wage within four years. To anyone who has been paying attention, this development will come as no surprise. After all, Biden promised as much on the campaign trail.

Does that mean a higher minimum wage hike is ensured? That remains to be seen. Similar legislation introduced in 2019 died in the Senate. But Democrats now control the chamber. It’s also possible the measure could get enacted via the reconciliation process.

There are strong feelings on either side of the minimum wage debate. On the one hand, the current rate, $7.25, remains ridiculously low. To be sure, many states and municipalities require considerably more. But not all. And even if a person making $15 an hour manages to work 40 hours every week for a year, the pre-tax income total barely would top $31,000. So we’re not exactly talking about creating intergenerational wealth.

The other side of the coin is this: Many senior living operators simply are not in a position to pay more. And it’s not just more for the people at or near the minimum. The new increase essentially will become the standard for others making a few dollars more.

And although few senior living operators are known for their fabulously high wages, labor does remain the highest single budget item across the field. Unlike the federal government, operators cannot simply fire up the printing press when more is needed. They must find a way to run a solvent operation with existing resources, or perish.

Clearly, developments are on a troubling path. The push for higher wages will continue. As will the need to meet business expenses.

How will things play out? Well, there are a few possible scenarios.

One is that operators will receive new subsidies from the federal government to help offset rising labor costs. That’s possible, but not very likely.

My take is that senior living operators will feel remarkable pressure to do two things. The first is to make workers even more efficient. The second is to find alternative ways to get things done.

How will that second scenario play out? Ever hear of robots?

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