Profit Margin
Such businesses usually make about a 5 percent to 7 percent profit margin after insurance, background checks and other costs, Perron said, and so have limited room to pay higher wages.
“Home-care companies will have little choice but to employ workers part time rather than full time as Medicaid payment rates and consumers with limited incomes cannot afford higher costs,” Andrea Devoti, chairman of the National Association for Home Care & Hospice, a Washington-based nonprofit, said in a Sept. 17 statement.
At the same time, the overtime rule could protect caretakers from being overworked, and having national requirements may improve industry oversight, Ruckelshaus said. Fifteen states provide both wage and hour protections to direct- care workers and an additional six and Washington D.C. require minimum wage, yet she said many lack resources for enforcement.
First Step
“It’s a good, really exciting first step,” said Jane Henrici, a study director at the women’s policy institute. “It’s not the end.”
Demand for direct-care workers is outpacing labor-pool growth, PHI found. The average age of in-home health-care workers is now 44, based on a 2011 PHI analysis, and the number of women ages 25 to 54, the main labor pool from which direct- care workers are drawn, is projected to increase by only 2 percent in the decade ending in 2020, based on Bureau of Labor Statistics data.
Immigration-law changes could help create a sustainable caretaker workforce. Immigrants make up 28 percent of in-home health-care workers, according to an analysis Henrici co-wrote, and an estimated one in five is undocumented.
The high number of undocumented caregivers is a result of the limited legal immigration options, said Ai-jen Poo, director of the National Domestic Worker’s Alliance, which advocates for in-home workers’ rights.
Immigration Bill