Why Boosting Home Care Wages Now Could Offset Labor Losses Later

For home care providers, the challenges surrounding workforce recruitment and retention have only worsened since the start of the COVID-19 emergency. But boosting caregiver wages could improve the industry’s labor shortage.

That’s according to a recent report from researchers at The City University of New York (CUNY) and the Association on Aging in New York. The report examines the costs and benefits of raising pay for home care workers in the Empire State.

In New York, caregivers working in the home are one of the fastest-growing and largest workforces due to the demand created by an aging population. The amount of caregiver positions is expected to spike from 440,000 in 2018 to over 700,000 by 2028.


The demand for caregivers exceeds the amount of available workers. On average, 17% of home care positions are currently left unfilled, according to the report. 

Additionally, New York providers will need to recruit an average of 26,510 new aides annually just to keep up with the growing demand for care. Providers will also need to recruit an additional 71,680 workers annually to replace the caregivers who leave these jobs.

Workforce shortages have begun to have an impact on seniors’ ability to receive care, Ruth Milkman, report co-author and professor at The Graduate Center at CUNY told Home Health Care News.


“Partly because the job is so poorly paid in much of New York state … there is a tremendous shortage of home care workers,” Milkman said. “People are on waiting lists, which means some of them may enter a nursing home instead, which is much more expensive. Also, while they’re on waiting lists and not getting adequate care, some may end up making visits to emergency rooms that they would otherwise avoid.”

Indeed, part of the reason recruitment can be a challenge in the industry is because caregiver wages are low. The median hourly income for a New York caregiver is $13.80, and the median annual income is $22,000.

By comparison, caregivers in other states don’t fare better than their New York state counterparts.

Across the U.S., the median wage for caregivers is lower than that of other jobs with similar entry-level requirements, such as janitors, retail salespersons and customer service representatives.

In 2019, direct care workers earned a median hourly wage of $12.80, a meager improvement from $12.61 in 2009, according to data from PHI.

Researchers propose increasing caregiver wages to $22 hourly in New York City, $19.25 hourly in Long Island and Westchester, and $16.50 hourly in the rest of the state.

One way of accomplishing this is through the state budget. The Fair Pay for Home Care Act, sponsored by New York state Senator Rachel May and Assembly Member Richard Gottfried, would increase wages to $22.50 per hour. The bill was introduced earlier this year.

Milkman noted that providers may be reluctant to throw their support behind this legislation, but ultimately this would benefit their business.

“My experience with employers, in general, is that they don’t really like the state telling them what to do,” she said. “In that sense, they may be resistant to these kinds of proposals. In our view, it’s in their best interests. Their business would grow and they would have more home care workers employed.”

Taking into account various factors associated with different states, Milkman believes that increasing caregiver wages would have a positive impact across the U.S.

“We only looked in detail at New York, but the basic logic should apply much more broadly,” she said. “The pay rates are very poor pretty much everywhere. We find that higher pay leads to lower turnover, and that means better quality of care, continuity of care, all those things. That’s true across the globe.”

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