Caregiving–What Should Be the Minimum Wage?

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As the Baby Boomer generation ages, the need for quality caregivers is greater than ever. Indeed, the United States is experiencing a tremendous shift in demographics, moving from a society in which relatively few people were over the age of 65 to one in which a significant number are: according to Pew Research Center, 10,000 people turn 65 each day in the U.S. As this shift takes place, the demand for qualified caregivers will continue to grow. It makes sense, then, to ensure that an adequate number of people possess the skills, training, and drive to enter into the field.

According to Pew Research Center, 10,000 people turn 65 each day in the U.S.

Caregiver wages

Realistically speaking, regardless of how kind-hearted or well-meaning someone may be, most of the time they will not go into a field that pays just over minimum wage as long as more lucrative opportunities are available. With that in mind, an exploration of the wages paid to caregivers—and what steps might be taken to increase these wages—is certainly a worthwhile undertaking.

Being a caregiver is nothing like working in a fast-food restaurant. Without demeaning the legions of fast-food workers in the U.S., the simple fact is that working in a fast-food restaurant is a relatively low-skill job. The training is minimal—typically a few days at best—and the level of dedication and attention to detail needed is not very high. Although, to be sure, there are some very excellent fast-food workers out there, the job itself does not necessarily demand this level of excellence, and this is reflected by the prevailing wages for these types of positions.

Regardless of how kind-hearted or well-meaning someone may be, most of the time they will not go into a field that pays just over minimum wage as long as more lucrative opportunities are available.

Being a caregiver is an altogether different matter. Caregivers must know about nutrition, elements of physical therapy, and the emotional well-being of their charges. Frequently they provide low-level medical care as well as cooking, cleaning, and other basic services. The position is one that requires a person who is able to exercise his or her emotional intelligence and be empathetic to his or her charge.

This being said, it makes little sense that a caregiver would be paid the same wage as a fast food worker because the former job takes considerably more abilities than the latter. Do we really want someone who has never done anything more advanced than entry-level work providing care for our elderly.

People will generally gravitate towards the wage level which they are capable of earning; simply put, if someone is able to earn $15 per hour doing something, it is highly unlikely he or she will remain in a job paying $8 or $9 per hour. Thus, the caregiver field is one that struggles to retain quality employees, because the quality employees quickly learn that they will be better compensated for their services in another field.

The industry turnover for caregivers is over 50%, meaning that more than half of the people in the field leave each year, presumably for better-paying positions. This means that few caregivers will remain on the job for the long-term, meaning that the profession as a whole is continually losing the skills that these workers have developed.

Solutions

Home care agencies claim that a wage of $15 per hour will bankrupt them. This hardly seems possible, given that they charge around $30 per hour for their employees’ time.

An option is to allow caregivers to act as independent contractors instead of as employees. In such a scenario, a home care agency would act as a sort of middleman, matching caregivers with people requiring their services. In this arrangement a caregiver could set his or her own rate, allowing the market to dictate the wages he or she may be paid.Given that many home care agencies already charge in the neighborhood of $30 per hour, this would allow caregivers to capture a pay increase. The home care agency would add a fee—15% or so—to the caregiver’s bill, allowing the agency to be paid for its time and trouble in matching caregivers to those needing caregivers.

Conclusion

Given the skills required to be a caregiver, a wage rate rivaling the rate paid to fast-food workers is simply not enough for caregivers. To prevent caregivers from fleeing the field, they should be paid a higher rate.

 

Sources

 Perry, Matt. Caregiving Crisis and the $15 Minimum Wage. Available at http://www.healthycal.org/2015/09/14/caregiving-crisis-and-the-15-minimum-wage/. Last visited October 21, 2015.

Pew Research Center (December, 29, 2010). Baby Boomers Retire. Available online at http://www.pewresearch.org/daily-number/baby-boomers-retire/. Last visited October 26, 2015.