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Homecare, federal/state/local mandates and low wage work

Homecare, federal/state/local mandates and low wage work. Candace Howes, Professor of Economics, Connecticut College FLSA 75 th Anniversary, DOL, Washington, D.C. Nov 15, 2013. Homecare’s role in raising the wage floor. Home care jobs singularly important because of size

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Homecare, federal/state/local mandates and low wage work

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  1. Homecare, federal/state/local mandates and low wage work Candace Howes, Professor of Economics, Connecticut College FLSA 75th Anniversary, DOL, Washington, D.C. Nov 15, 2013

  2. Homecare’s role in raising the wage floor • Home care jobs singularly important because of size • Rate of growth far exceeds that recognized by policy-makers • Challenges • Structure of industry makes it difficult to mandate floor on wages and benefits • Medicaid politics • Invisibility of job • SF and California provide model • Creating quality home care jobs is critical to raising wage floor and building a quality and affordable long term care system

  3. The Long term Care Industry Milledgeville (GA) State Lunatic, Idiot and Epileptic Asylum Established in 1837, still in operation

  4. Long term care industry • Commodification of household work • Demographic trends • Funding: Industry largely defined by Medicaid and to lesser extent Medicare • Consumer preference and fiscal constraints re-shape industry

  5. Trends in LTC industry • Rebalancing & rapid growth – Home care/home health fastest growing industry in U.S.; PCA and HHA fastest growing occupations • To consumer-directed from agency-based model • Advantages : • Consumer/provider preference • Option for family providers • Significantly lowers costs • Disadvantages: • Can pay low wages, poor/no/little training, largely unregulated

  6. The Care Gap

  7. The home care Work Force Humboldt County - CUHW Rally

  8. Long term Care workers by Occupation (%), 2010 Source: Howes, Leana & Smith from 2010 CPS, 2012

  9. Characteristics of Low wage, home health, PCA workforce 2010

  10. Demographic characteristics

  11. Home care job: things we… Know Don’t know and should How many there really are What constitutes a good job Agency or CD PT/FT or flexible Wages, benefits, training, career ladders Whether job quality …spills over from one sector to another …affects quality of care …affects costs • Fastest growing jobs in U.S. • One of lowest paying, poorest benefits • Workers motivated by intrinsic and extrinsic rewards • Some evidence of workers prefer homecare over institutional jobs • Some evidence want flexible, more than PT jobs

  12. Challenges to reform • Industry resistance: • Emerging industry resists FLSA • right-to-work organizations challenge “fair share” fees - Harris v. Quinn • Medicaid politics • Invisible occupations

  13. FLSA and Harris v. Quinn

  14. Why states are scared of Medicaid (and want to cut wages)

  15. Invisibility: Misconceptions about homecare • Homecare is not really work • Most people are family providers • Most work part-time; have other “real” jobs • Crowding out: If you pay people to provide care, they will do it for the wrong reasons, get the wrong care-givers • Providers won’t quit if we don’t give them a raise • Providers won’t quit when unemployment is high

  16. California as model for better jobs, better care

  17. California In-Home Supportive Services (IHSS) • “Balanced”: 75 percent Medicaid LTC recipients in HCBS; nationwide - 50 percent • Largest consumer-directed program in U.S.: 450,000 recipients/400,000 providers – over half hire family provider • Compensation now set at county level; range from $8 in Humboldt to $12.35 in San Mateo – federal/state/county contribution; public authority bargains with unions • Rapid growth – 3% annual caseload growth 1994 – 1998; 8 percent -1998 – 2008; not explained by demographics

  18. Significance in San Francisco LOW WAGE workforce • San Francisco workforce – 476 thousand • IHSS workers – 20,000 – 4 percent • Low wage workers (bottom 15 percent) – 71,000 • IHSS workers – 28 percent of low wage workers • IHSS workers > 50 percent of low wage female workers • Quality of jobs for low wage workers ….

  19. San Francisco IHSS, 1995 - 2009

  20. Impact of turnover 1997 - 2002 • Previous study on SF Turnover: • Turnover, wages & benefits in SF 1997 – 2002 (Howes 2005) • Results: • Wage increases and health insurance lower turnover • from 22 to 15 percent for all workers; • From 61 to 24 percent for new workers

  21. Impact of turnover 2002 - 2009 • Update to 2009: • Turnover, relative wages, unemployment rates in SF 2001 – 2009 (Howes in Reich and Jacobs, forthcoming) • Results: • Turnover continues to decline • Controlling for other variables, from 24 to 20 percent as rel wage increases from 0.8 to 1.4

  22. conclusions • SF/CA built long term care system that met needs of consumers, reduced overall costs of LTC, limited power of for-profit LTC industry • Raising wages, providing health insurance improved job quality, reduced turnover • SF provided lead – diffused to other counties, other states • Because home care jobs huge proportion of low wage jobs in areas with large indigent population; good homecare jobs can raise low wage base

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