February 11, 2021
Ann Arbor, MI — As nursing homes and the broader long-term care system recover from Covid-19, they face another daunting challenge—a low supply of direct care workers to assist the growing numbers of aging Americans, according to a new report from Altarum and PHI.
The report examines the state of the long-term care (LTC) workforce in Michigan, with special focus on direct care workers, and factors that contribute to the instability of the workforce and how to address them. Direct care workers—personal care aides, home health aides, and nursing assistants—make up 75 percent of the state’s 106,000 LTC workforce.
Direct care jobs are among the fastest growing in the state with 238,200 total job openings projected between 2016 to 2026. Yet wages have remained stubbornly low for this workforce that is predominantly female (88 percent) and people of color (41 percent). In 2018, the median wage for direct care workers was $12.47 per hour, two cents lower than the inflation adjusted wage in 2008. Even wages in the fastest-growing direct care occupation—personal care aides—increased only $.21 over the same period.
Compounding the problem of low wages, part-time scheduling is common in the field. The median annual income of a direct care worker in Michigan is $16,600. One in five lives in poverty, over half live in a low-income household (200 percent of the federal poverty line), and nearly half rely on public assistance to meet their basic needs.
Stakeholders interviewed for the report explained that low wages make it difficult to recruit and retain qualified direct care workers and that employers face stiff competition from other sectors, including retail, fast food chains, and Amazon distribution centers, which in many cases offer comparable or higher wages. One-third of direct care workers leave their occupations each year.
An inadequate and fragmented training landscape, which falls short of ensuring a consistent supply of confident and well-prepared workers to fill vacant positions, also contributes to the instability of the workforce.
Nine out of ten direct care workers are women, and more than 40 percent are people of color, so improving the compensation and stability of direct care jobs can also advance gender and racial equity in the state.
The study also examines disparities within the workforce: for example, in both home care and residential care settings, men earn more than women. And 63 percent of women of color in the direct care workforce live in households below 200 percent of the federal poverty level, versus 46 percent of white women and 47 percent of men.
Following are recommendations from the report that could be tailored to any state interested in building a stronger and more equitable direct care workforce:
Improve compensation. Provide a family-sustaining wage and racial and gender-based equity in compensation practices. Promote full-time hours for those who want them and provide health insurance, paid leave, and retirement contributions.
Invest in direct care workforce recruitment and retention. Convene a body of diverse stakeholders to inform workforce development activities, establish a state program to fund projects to strengthen recruitment and retention, launch a workforce development program, and establish a matching service registry.
Strengthen training. Mandate the use of high-quality training curricula, enact a credentialing system, designate funds for entry-level training, and allocate funds to pilot-test and scale-up advanced roles for workers.
Strengthen workforce data collection and reporting. Collect detailed data on the size and compensation of the workforce across settings, payers, programs, and employment models. Measure workforce stability and shortage indicators and publish workforce data and make them widely available.
The report also provides recommendations for supporting family caregivers, including improving navigation assistance, creating new funding and benefit structures to support family caregivers, and devising additional supports for family caregivers to improve their physical and emotional health.
Conducted by Altarum and PHI, the study includes quantitative analysis, key informant interviews, listening sessions, and individual interviews. It was authorized by the Michigan legislature and funded by the state, the Michigan Health Endowment Fund, and the Ralph C. Wilson Jr. Foundation.