Hourly wages in senior living communities have increased by 30.9% over the past five years, outpacing growth in the broader private sector by 6.5 percentage points. But the labor market remains “exceptionally tight” as operators struggle to compete for talent with the private market, according to newly released research.
A new white paper from Argentum, “Wage Trends in Senior Living Communities,” looks at wages in the senior living industry compared with wages in the overall private sector. The goal of the report, according to the association, is to help lawmakers, families, senior living operators and other stakeholders make decisions and support policies addressing an impending industry labor crisis.
Using data from the Current Employment Statistics program from the US Department of Labor’s Bureau of Labor Statistics, the report compared senior living and private-sector wages between 2019 and 2023.
The past several years saw the convergence of financial challengings driving up senior living operating expenses, including the COVID-19 pandemic, the great resignation, inflationary pressures and rising interest rates. The cost of labor is the single largest operating expense for communities, often exceeding 60%, according to the report.
Among the key findings of the research are that senior living hourly wages increased by 30.9% in the five-year study period, equating to a 6.2% annual increase, which is 1.6 percentage points higher than the increase in the private sector, which saw a 24.4% average hourly wage increase.
Looking at specific roles in senior living communities, Argentum found that the five-year hourly wage increases for several direct care positions exceeded the overall hourly wage increases in the private sector, ranging from 7% to 12%.
Lead certified nursing assistants, for example, saw their hourly wages increase the most, on average, 49.2%, over five years, for a 12% average annual increase. Medication aides saw their hourly wage grow 34.1% over five years, a 7.6% average annual increase. Activity aides saw hourly wage increase an average 33.3%, or 8.3%, on average, annually.
Certified nursing aides saw hourly wages rise by 30.2% over the five years, on average, representing an average annual increase of 7.6%, whereas resident assistants saw hourly wages increase by 28.1% over the five years, or an average of 7% annually.
Wage competition ‘fierce and unsustainable’
Despite those wage increases, the industry continues to struggle to attract and retain talent. According to the report, senior living communities already are “feeling the pinch” in competing for workers with employers in the private sector, with the hourly wage competition becoming “fierce and unsustainable.”
This news comes as the aging services industry needs more workers to fill a “historic” rise in demand for services over the next two decades, according to the report.
Accounting for job growth and attrition, the industry overall anticipates the need to recruit and hire more than 20 million new employees in fewer than two decades. To maintain a sizable 2040 workforce, senior living communities will need more than 3 million new workers, according to Argentum.
The association maintains that senior living communities provide the most effective, cost-efficient care delivery system. If senior living were not an option, the report stated, as many as 61% of residents would be forced into costlier skilled nursing facilities, “crippling” state and federal Medicaid budgets.
Call to action
The report called on lawmakers to support policies that address workforce shortages by building on existing Health and Human Services and Department of Labor workforce training programs, such as Job Corps and American Job Centers, to offer specializations in senior care.
The association also is seeking grants for assisted living communities to establish on-site childcare centers for intergenerational care and activities, as well as expanded eligible uses of tax-advantages savings plans to cover workforce training and credentialing program costs.
In addition, Argentum called on older adults and their family members, senior living operators, educators and students to learn about the impending labor challenge in senior living and care and to make informed decisions to support policies and programs to address it. Those groups also were encouraged to learn about the range of care options and prepare for future needs, as well as talk about career opportunities in senior care.
