The coronavirus pandemic has highlighted the role of the country’s 3.5 million direct care workers on the front lines of the public health crisis, but those workers are undervalued and face barriers to economic security, according to a new report from LeadingAge.

“Making Care Work Pay: How Paying at Least a Living Wage to Direct Care Workers Could Benefit Care Recipients, Workers and Communities” found that higher wages for direct care workers can positively affect their financial well-being, reduce turnover and staffing shortages, boost worker productivity, enhance quality of care, and spur economic growth in communities.

LeadingAge hosted a panel discussion on the report Tuesday; it included aging services leaders, researchers, advocates and care providers

According to the report, one in eight direct care workers — nursing assistants, personal care aides and home health aides who work in residential care settings and private homes — live in poverty, and more than half received public health benefits in 2018. About 48% of direct care workers earned less than a living wage in 2018, earning, on average, $13.36 per hour last year. A majority (84%) lacked retirement benefits through their employers in 2019, and 14% had no health insurance.

LeadingAge researchers reported that raising wages to at least a “living” wage — which allows a family of three to live out of poverty — in 2022 would benefit 75% of direct care workers, proving an average 15.5% pay increase that year, increasing total wages for this workforce by $9.4 billion nationwide.

Although researchers acknowledge it’s not the only way to improve the lives and livelihoods of this workforce, they said it’s a first step.

Christian Weller, Ph.D., a professor in the Department of Public Policy and Public Affairs at the University of Massachusetts Boston, and one of the report authors, said that higher pay would reduce turnover and lower costs for recruitment and training. It also would reduce financial insecurity, help people break out of the poverty cycle, reduce their stress and allow them to focus on their jobs, thereby boosting productivity.

According to the report, enhanced retention and recruitment efforts would add the equivalent of 330,000 direct care workers to the range of those already employed — a 9% boost to employment in 2022. Total productivity would increase by at least $5.5 billion as it became easier for employers to retain and attract a larger number of qualified workers.

As workers would come off public assistance programs, such as Medicaid, food stamps, free and reduced school lunches and housing subsidies, $1.6 billion could be saved. And workers who earn more likely wouldl spend more in their communities, adding $17 billion to $22 billion to local economies in 2030.

Stephen Campbell, a PHI data and policy analyst, said there will be 8.2 million direct care job openings between 2018 and 2028 due to high demand and turnover in the field. 

Clockwise from upper left: LeadingAge President and CEO Katie Smith Sloan, Ann Hwang, M.D., Hayley Gleason, John Sauer and Haeyoung Yoon.

“Living wages will help bend the curve on turnover and job vacancies,” Campbell said. “We need to pay workers a wage commensurate with the critical role they play in the lives of older adults and people with disabilities, commensurate with the health and safety risks they face on the job every day.”

David Grabowski, Ph.D., a professor of healthcare policy at Harvard Medical School, said that the most important predictor of high quality outcomes in healthcare recipients is staff. The LeadingAge report, he said, shifts from showing the cost to higher wages to the benefits higher wages produce.

“We are asking so much of this workforce but not paying them enough,” Grabowski said. “This is a great roadmap to paying direct caregivers a living wage.”

Mark R. Ricketts, president and CEO of National Church Residences, a not-for-profit provider of the full continuum of senior care and services, said his organization recognized a few years ago that the biggest driver of quality is a “happy, engaged staff.” In 2016, National Church Residences moved toward offering a living wage, which was an 11% increase in the minimum wage for 3,000 workers across 23 states.

“We launched an adventure we had no way to pay for,” Ricketts said. “We realized it was brutally expensive. And we haven’t found a way to pay for it.”

The organization is in the fourth year of the program, planning to achieve a minimum wage of $15 for every worker by next year. He said although staff retention overall is at 90%, it still exceeds 50% on the front lines. That result led the company to launch a new division on employee engagement, leadership development, career development and educational benefits.

“We are showing them a career path,” Ricketts said.

Hayley Gleason, Ph.D., director of the Strategic Outcomes Division of the Colorado Department of Health Care Policy and Financing, said that one of the benefits of the pandemic is that “it shined a spotlight on the importance of direct care workers and how important they are to older adults and people with disabilities.”

“Despite the challenges ahead, we can’t delay in identifying creative solutions to support this workforce,” Gleason said. “The reality is it’s time to properly acknowledge and reward them for the expertise and skills they bring. Advancement, specialization opportunities, increases in wages and benefits should all be part of our goal.”

Ann Hwang, M.D., director of the Center for Consumer Engagement in Health Innovation at Community Catalyst, said it’s time to take the research and move into action.