Last week, I had the pleasure of speaking at the National Council for Research on Women’s 30th Anniversary Annual Conference to about 250 women researchers, policy specialists and advocates. One of this year’s conference themes was strengthening women’s economic security – a perfect opportunity to discuss both women’s job gains during the recovery and the continuing challenges faced by women in the labor market. Many of these issues long pre-date the recent recession, like the gaps in benefits between women and men in the workplace as well as the continuing gender pay gap which accumulates over a woman’s working life.
Another issue of concern is the unfortunate way we treat the nearly two million workers employed in the home care industry who take care of us and our loved ones. While this issue has been around for a few decades, it has become more salient in recent years as the home care industry continues to grow and our population continues to age.
In 1974, when Congress amended the Fair Labor Standards Act to provide wage protections for domestic service workers, it created narrow exemptions for casual babysitters and in-home companions for the aged and individuals with disabilities that continue to be applied to today’s skilled in-home care workers. On December 27, 2011, President Obama announced the Department of Labor’s proposed updates to regulations under the Fair Labor Standards Act that would ensure minimum wage and overtime protections to most in-home care workers.
From 1988 to 1998, the number of home health and personal care aides tripled; doubling again in the ten years that followed. What was once your neighbor coming down the street to play cards is now a skilled worker in an industry that employs nearly two million people. Moreover, in-home care occupations are expected to experience growth of 70% over the next decade, among the fastest growing occupations in the U.S.
Sadly, despite the industry’s massive growth, in-home care workers are paid well below average wages. Additionally, we haven’t updated regulations on minimum wages and overtime for these workers in 37 years, meaning employers can avoid paying minimum wages and overtime pay to more workers. This is not what Congress intended when the Fair Labor Standards Act was amended to ensure domestic service workers are properly paid for hours worked.
The proposed changes to the regulations are of particular interest to women. About 90 percent of in-home care workers are women. Many are women of color, recent immigrants and working long hours for low wages. About 40 percent depend on public assistance, like Medicaid and food stamps, just to make ends meet.
The immediate economic impact of this proposed rule would be minimal. In the long-term, however, it has the potential to create good jobs for more workers by professionalizing this workforce. The result is better care for our parents and grandparents in the future and fewer in-home care workers requiring taxpayer-funded public assistance to provide for their own families.
Indeed, fifteen states already provide minimum wage and overtime coverage for most in-home care workers, and the industry in these states remains vibrant and growing. Employers have managed to control overtime costs by more evenly balancing work among existing and new workers, and the industry continues to thrive. The Paraprofessional Healthcare Institute, or PHI, issued a 2012 report describing three case studies of employers who have already done this successfully.
Moreover, this is an industry that is plagued with high turnover, which by definition leads to a diminished quality of care. And it’s no secret why – most workers with abysmal levels of pay coupled with long hours only stay long enough to find something better.
Finally, the impact of the proposed rule on Medicaid would also be minimal, representing less than one percent of Medicaid’s home health budget.
In-home care workers are a large, growing and critical segment of our workforce. They are taking care of our precious loved ones – our fathers, mothers, and our disabled veterans. The Department proposed the rule to ensure that we have skilled workers able to provide high quality care for the most vulnerable among us long into the future.
Adriana Kugler is Chief Economist at the U.S. Department of Labor.