Wage Rates:...And Could We Care Less?

If we want to ensure that our loved ones will have someone to care for them in the years—or months, or days—to come, then we must value direct-care workers for what they are: a scarce resource.

Unfortunately, our nation is so far from valuing direct-care workers that we pay them, on average, a median wage of just $7.97 per hour—one-third less than the median wage of all workers in the United States at $11.87 per hour, as calculated by the Economic Policy Institute.

Although the median wage rate does vary slightly by region, it is important to note that in no region do direct-care workers earn more than 70% of the median wage for all workers in their region. All states could do greater economic justice by their direct-care workers.

Direct-Care Worker Earnings

Median wages of direct-care staff range from $8.29 down to $7.50. National median hourly wage estimates and annualized wage rates for each of the three job categories for 1999 are provided below. Annualized full-time employment is assumed to equate to 2080 hours per year. ^xvii

However, significant numbers of direct-care workers, particularly those working in home-based settings, would prefer to work full-time, but are unable to piece together regular 40-hour work weeks due to the part-time structure of the industry.^xviii Therefore, the chart shows the annualized wage for each job category assuming the worker is only able to obtain 30 hours of work per week, equating to 1,560 hours annual employment.

In fact, the May, 2001 GAO testimony to the U.S. Senate stated that the median income of all nursing home direct-care staff was $13,287 per year, while the median income for all home-based direct-care staff was just $12,265 per year.^xix

To provide a context for comparing wage variations across the country, we provide annualized full-time wage data by region, and then compare those wages to national, regional and state per capita personal income data.

Therefore nationwide, the full-time annualized wage of direct-care staff is less than 65 cents on the dollar of the annualized per-capita income for all Americans. This comparison demonstrates that every region is wealthy enough to support higher pay and work standards for its direct-care workforce.

A second way to compare wages for direct-care workers by geographic region is to compare direct-care average median hourly wages to the state median hourly wages across all worker categories. The chart compares these two variables.

A comparison of state-specific annualized wages for all three categories of direct-care workers, compared to state per capita income data is included in Appendix 2.

The average of the median hourly wages for all three types of direct-care staff was $7.97 in 1999, compared to a national median hourly wage of $11.87.

In Appendix 2, three tables show the state-by-state ranking of direct-care median hourly wages (by job category) as a percent of the state’s median hourly wage. The states are ranked based on how well the direct-care worker median hourly wage compares to the state’s median hourly wage. The states are listed from the worst to the best rankings.

Ten states stand out as having the least favorable comparison between the median hourly wage of direct-care workers to their state’s particular overall median hourly wage for all workers.

At the Edge of Poverty

To provide a glimpse of the typical standard of living for hundreds of thousands of direct-care workers, the table below shows the 1999 median annual wages for aides working in nursing homes and aides working in home care settings. This comparison assumes that these wages are the sole source of income for the household, which may or may not be the case.

In fact, according to the GAO, 18 percent of all nursing home aides and 19 percent of all home care aides go home each night to families who are living in poverty. Approximately 46 percent—nearly one out of every two—nursing home and home care aides live below 200 percent of poverty.

Subsidizing the Care System

Given the high rates of poverty and near-poverty among long-term care workers, reliance on public benefits is a necessity for many direct-care workers to support their families. Such dependence on public benefits is a "hidden subsidy" for the long-term care system—without which even fewer workers would be able to "afford" direct-care work.

Two examples of key public benefits often accessed by low-income individuals are food stamps and Medicaid coverage for health care. In addition, children of certain low and moderate income families who do not have health insurance coverage may be eligible for health insurance coverage under State Children’s Health Insurance Programs (SCHIP). Many low-wage workers are also entitled to take a credit on their federal tax return known as the "Earned Income Credit."

During his May 17, 2001 testimony before the Senate Health, Education, Labor and Pensions Committee on nurse and nurse aide workforce issues, William Scanlon, Director of Health Care Issues for the US General Accounting Office, stated nurse aides working in home health agencies and nursing homes are twice as likely to receive public benefits—specifically food stamps and/or health insurance coverage through Medicaid, than workers in other job categories.xxi Examples of direct-care workers’ eligibility for these key public benefits are detailed in Appendix 1.