Obama Addresses Raising Minimum Wage, Indirect Impact for Home Care Workers

President Obama advocated for higher federal minimum wages in last night’s State of the Union address, but proposed rules for the Fair Labor Standards Act to extend to home care workers must first be implemented for higher wage requirements to have a direct impact on personal care aides and home health aides.

“Tonight, let’s declare that, in the wealthiest nation on Earth, no one who works full time should have to live in poverty—and raise the federal minimum wage to $9 an hour,” the president said. While the current federal minimum wage is $7.25, 19 states have chosen to institute higher wages since the last time the federal rate was raised by Congress, he continued.

It was “terrific” that the president announced raising the minimum wage as an objective in the State of the Union address, says Steve Edelstein, national policy director at PHI (Paraprofessional Healthcare Institute), but there’s an important step that’s missing for a direct impact on home care workers.

“The one irony is that, for direct care workers in the home and community, the home care workforce isn’t subject to federal minimum wage or overtime wage protection,” he says.

However, if all other wages are going up, it’s expected that home care workers’ employers would have to follow suit, he says, and wages would go up due to labor market dynamics.

In December 2011, the Department of Labor proposed rules extending the Fair Labor Standards Act (FLSA) for minimum wage and overtime protection to home care workers. The public comment period that lasted throughout the spring of 2012 garnered about 25,000 comments—three-quarters of which were in favor of the proposed rule, according to Edelstein.

“It generated a lot of interest, and a lot of folks weighed in on behalf of these workers, who are critical to providing home- and community-based services,” he says. The rules have now gone to the Office of Management and Budget for review and are working their way through the regulatory process.

In 2011, the national median wage for personal care aides was $9.49, representing a less-than-1% increase from the previous year. In a 10-year period between 2001 and 2011, 41 states showed a decline in “real” median wages for PCAs, after adjusting for inflation.

Those numbers are averages, Edelstein emphasized, so for those whose wages track the federal minimum wage, some would see an increase.

“The economic security of hundreds of thousands of caregivers who make it possible for others to live independently is at stake,” said Dorie Seavey, PHI director of policy research, when the analysis was released. “It will be very difficult for our country to meet the rapidly growing demand for personal assistance workers without improving these wages.”

Personal care aides belong to the fourth fastest-growing occupation in the nation, according to PHI, as the nation’s 65+ demographic is expected to comprise about 20% of the overall population by 2050.

“We know our economy’s stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year,” said Obama during his speech. “Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong.”

Written by Alyssa Gerace

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