Paying caregivers more could boost Nebraska’s economy − new research

Paid caregivers foster independence and improve quality of life for people with all kinds of disabilities, many of whom need help getting dressed, preparing meals, showering and dealing with other activities of daily living^[1].

There are over 10,000 paid caregivers of people with disabilities and adults over 65^[2] in Nebraska, where we work and often conduct research. Across the country, there are 3.7 million paid caregivers, and the federal government expects their ranks to grow by 22%^[3] over the next decade.

Compensation for these workers, however, is extremely low^[4].

The median hourly wage for Nebraska’s paid caregivers in 2023 was US$13.55 per hour^[5]. Although the typical caregiver logs significant amounts of overtime beyond a 40-hour week due to the chronic labor shortage, they still take home just $32,960 per year. And that’s far below the $49,009 annual income^[6], according to one estimate, that single adults needed to make ends meet in Nebraska.

While paid caregiving is among the country’s fastest-growing occupations^[7], the job’s low pay and meager benefits contribute to high turnover^[8]. A shortage of these workers is compromising the quality of care and creating long waitlists^[9] for people who need it.

About 30% of paid caregivers across the nation work part time^[10] for a variety of personal and economic reasons. Some are students. Others are already caring for their children, parents or other relatives. In many cases, their employers don’t pay for employment benefits such as health insurance, retirement plans or paid time off.

Lacking decent benefits can take a toll on job satisfaction and productivity – and cause burnout^[11].

High turnover

The share of paid caregivers who quit^[12] within a year varies widely, ranging from 28.5% in the District of Columbia to 59% in Wyoming. About half of Nebraska’s paid caregivers leave their jobs every year.

The National Alliance for Direct Support Professionals, an association that represents caregivers and their employers, estimates that hiring new caregivers costs anywhere from $2,413 to $5,200^[13]. Conducting fewer background checks and training new hires less frequently saves the state and federal governments money, given that the employers foot that bill through contracting with state governments.

Unlike in other industries, the employers of caregivers for people with disabilities can’t just pay workers more to make these jobs more alluring. That’s because their wages are set or heavily influenced by state and federal funding levels^[14].

For the most part, caregiver pay is set by Medicaid^[15], the government’s health insurance program for low-income Americans, and Medicare, which provides Americans over 65 and younger people who receive disability benefits with health insurance. States administer Medicaid^[16] and share its costs with the federal government.

People with disabilities who frequently get new paid caregivers go to the emergency room more frequently^[17], have more instances of abuse and neglect and get injured more often.

Reducing caregiver turnover not only improves quality of life for people receiving services, it saves tax dollars spent on costly hospital stays^[18] covered by Medicaid and Medicare, as well as through lower numbers of abuse investigations and other expenditures that arise when people with disabilities don’t get the care they require.

References

1. ^{^} activities of daily living (www.ncbi.nlm.nih.gov)
2. ^{^} 10,000 paid caregivers of people with disabilities and adults over 65 (www.bls.gov)
3. ^{^} grow by 22% (www.bls.gov)
4. ^{^} is extremely low (kffhealthnews.org)
5. ^{^} hourly wage for Nebraska’s paid caregivers in 2023 was US$13.55 per hour (www.bls.gov)
6. ^{^} far below the $49,009 annual income (www.cnbc.com)
7. ^{^} paid caregiving is among the country’s fastest-growing occupations (www.bls.gov)
8. ^{^} contribute to high turnover (axiscare.com)
9. ^{^} creating long waitlists (www.kff.org)
10. ^{^} work part time (ici.umn.edu)
11. ^{^} job satisfaction and productivity – and cause burnout (www.nfp.com)
12. ^{^} share of paid caregivers who quit (www.naswa.org)
13. ^{^} costs anywhere from $2,413 to $5,200 (nadsp.org)
14. ^{^} state and federal funding levels (www.sciencedirect.com)
15. ^{^} caregiver pay is set by Medicaid (dhhs.ne.gov)
16. ^{^} States administer Medicaid (www.kff.org)
17. ^{^} go to the emergency room more frequently (www.c-q-l.org)
18. ^{^} saves tax dollars spent on costly hospital stays (www.aaidd.org)
19. ^{^} BSIP/Universal Images Group via Getty Images (www.gettyimages.com)
20. ^{^} Ashley Robinson (scholar.google.com)
21. ^{^} Nebraska Association of Service Providers (www.neserviceproviders.org)
22. ^{^} wage gap between paid caregivers and child care workers (www.bls.gov)
23. ^{^} IMPLAN multiplier system (blog.implan.com)
24. ^{^} costly for state governments (www.nga.org)